The AIM-listed firm will use the combination of equity and bond issuance to raise the funds. So far it has received firm commitments to subscribe for a total of 1,900,211 ordinary shares at a price of £1.09 per share to raise £2.07m gross of expenses.
Firm commitments have also been made to subscribe for £752,000 in nominal amount of bonds, which are expected to start trading in September. These will be offered at a yield of 8% and are due in 2020.
Proceeds of the fundraising will be used to provide additional working capital, AFH Financial said, and to finance potential future acquisitions.
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AFH Financial floated in June 2011 on the Plus exchange, raising £1.8m. It said at the time it wanted to use its listed position to “accelerate its acquisition strategy” as the IFA sector was “ripe for rationalisation and consolidation”.
It is among a growing number of acquisitive discretionary fund managers and networks looking to take advantage of the post-RDR landscape of uncertainty.
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A Midlands-based firm, its latest acquisition of Shape Financial bolstered its presence in the south west of the country.
Alan Hudson, chairman and chief executive of AFH Financial, said: "Today’s fundraising is a strong endorsement of the company’s organic and acquisitive business strategy, executed against the background of a tight credit market. We are pleased to have received this strong level of support from the investment community and look forward to moving ahead with our strategy to become a leader within our field. AFH is well funded, debt free, dividend paying and perfectly positioned."
