Staffline issues £50m cash call to reduce debt pile

Staffline, the Nottingham headquartered recruitment and training giant, has revealed plans to raise over almost £50m through a share issue.

The company says it will use the company to pay off its debt pile.

Staffline wants to raise £44m through a proposed placing of 87,249,500 new ordinary shares and a subscription offer of 750,500 new ordinary shares – both at a price of 50 pence per share.

The firm says that some directors and employees are subscribing for placing and subscriptions shares. The aggregate investment by directors will amount to around £500,000.

Staffline hopes to raise another £4.4m by way of an open offer and is carrying out a refinancing of its debt facilities. However, it has warned that if the share issue target isn’t met, it won’t be able to carry this out.

A statement from the company said: “Notwithstanding some uncertainty in relation to the pace of lockdown easing and recovery of certain sectors such as travel, the board is confident in the outlook and believes that the group is well positioned as a market leading recruitment and training business with a strong reputation for quality delivery. Its strategy is to capitalise on the group’s leadership position in blue collar recruitment whilst expanding higher margin permanent recruitment services and to cross sell employability and training into its blue-chip client base.

“However, the group has required additional funding, which has been provided by Covid-19 related VAT deferral relief from the period from March to June 2020. This is now repayable and the group is therefore carrying out the fundraise and debt refinancing to meet this funding requirement. With the proposed strengthened capital structure in place, the board believes that the group would be in a strong position to take advantage of the increasing opportunities arising from improving business confidence and the wider Covid-19 economic recovery.”