Private vehicle and business asset finance provider Private & Commercial Finance Group (PCFG) is looking to raise up to £10m to invest in business growth through an issue placing and open offer of 6% convertible loan notes.

Growth will include increasing the Group portfolio from £80m to £100m.

At present, PCFG, listed on the Alternative Investment Market (AIM), has raised £810,000 under the placing, earmarked for corporate and portfolio acquisition. The fundraising still requires shareholder approval and admission of the new loan notes to the Official List, expected soon.

Although PCFG is AIM-listed the loan notes will be traded on the standard listing segment of the London Stock Exchange’s main market.

£55m facility

PCFG said in a statement the money raised "strengthens the balance sheet of the Group, particularly in the eyes of senior debt providers". As such, Barclays has renewed its £55m facility to the Group’s subsidiary Private and Commercial Finance Company Limited until 1 October 2015.

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The issue will also free PCFG to redeem the existing 8% and 10% loan notes set to mature in September 2013 when the Group’s largest shareholder, Bermuda Commercial Bank (BCB) will provide £3m in repayment.

BCB has also subscribed to an immediate £900,000 of loan notes and, although £4.1m of the issue will be offered to existing shareholders and loan note holders, BCB will underwrite the issue if the open offer is not taken up fully.

Scott Maybury, chief executive of PCFG said the support of BCB plus committed debt facilities would allow the Group to make good on the strategy outlined in its Annual Report.

"The loan note issue and securing of all debt facilities on a longer term give us a platform and the confidence to grow the portfolio and improve the Group’s return on assets towards our target of 2%," added Maybury.

richard.brown@vrlfinancialnews.com