Accrol hopes to raise £18m

Accrol, the troubled Blackburn-based tissue manufacturer, plans to raise £18m through placing new shares on AIM.

The firm's shares were previously suspended from trading due to financial difficulties, resuming on Monday November 20.

Accrol also faces a heavy fine from the Health and Safety Executive, and recently announced plans to cut 89 jobs.

Through Zeus Capital, Accrol has offered 36 million new shares at 50p each to qualifying investors. The company says proceeds will be used to mitigate an identified short-term funding requirement, support future working capital requirements, implement restructuring, implement plans to review and improve the group's health and safety procedures, assist in meeting revised banking covenants, and pay costs associated with the placing.

Peter Cheung, chairman of Accrol, said: "The past few weeks have been extremely challenging for Accrol and its shareholders, as we navigated our way through industry-wide issues and sought a solution to the group's short-term funding problems.   

"Our new CEO, Gareth Jenkins, who joined the company on 11 September, is already having a positive impact on the business. He has completed a full operational review and a restructuring is now underway. Gareth's considerable industry knowledge and proven track record for delivering significant operational efficiencies give the board confidence going forward and we look forward to providing regular updates on the group's progress."