SJ Berwin advised AIT Group on its £20.5m rescue plan after being approached by the software company for the first time.
A team led by corporate finance partners Robert Burrow and David Parkes advised on the rescue plan, which was put together over an intense three-week period. The plan was conditional upon the approval of AIT Group's shareholders, obtained at a meeting held earlier this month.
Following the meeting, AIT has moved from a listing on the Official List to the Alternative Investment Market.
Since its inception in 1986, AIT grew into a successful software solutions company and floated on the London Stock Exchange in 1997. However, since the financial year ended 31 March 2002, the company has faced a number of liquidity problems. AIT first approached SJ Berwin in mid-June, shortly after issuing a shock profits warning. AIT was forced to put itself up for sale and suspend its shares from trading after warning that its liquidity crisis could only be solved if it was sold.
Commenting on the instruction, Burrow said: “The company's directors decided they wanted some fresh advice and came to SJ Berwin for advice on their role in the reconstruction.”
The introduction to SJ Berwin came through the company's founder Richard Hicks, who got to know partner Philip Goldenberg through the RSA's Tomorrow's Company Inquiry into how businesses achieve sustainable success. AIT's usual advisers are understood to include Freshfields Bruckhaus Deringer and Norton Rose. But it is understood that Freshfields was conflicted out.
AIT's rescue package consisted of a placing with institutions to raise approximately £6.4m; a placing with Core Investors, which comprises Hicks, Bessemer Venture Partners and Martyn Arbib to raise £2.5m; and a five for one rights issue to raise approximately £3.6m.
SJ Berwin also advised AIT in relation to a £6m convertible interim financing arrangement with the Core Investor Group. Taylor Wessing advised Core Investors led by corporate finance partner Tim Oldridge.
The non-Core Investor placing and rights issue has been underwritten by Old Mutual Securities, which also advised the company as sponsor.
The rescue plan will, among other things, reduce bank borrowings and fund internal restructuring to help put the company back on a firm footing.
The move will see Hicks and his co-investors end up with 41.25 per cent of the company, while current shareholders will own as little as 3 to 4 per cent if they do not take up their allocation of shares in the rights issue.