WH Ireland shares slid almost 70% on Friday as the wealth manager completed an urgent placing of ordinary shares to meet FCA capital requirements.
In a stock exchange announcement, the firm announced the completion of a placing to raise around £5m at an 86.7% discount to last night’s (27 July) closing share price.
Under the placing, the firm offered existing shareholders and new investors ordinary shares at just 3p each.
At the time of writing at 1:30pm (28 July), WH Ireland shares had plummeted 69.6% to 6.85p.
CEO Phillip Wale (pictured), added: “The proceeds of today’s placing bolsters our regulatory capital and together with the cost reductions we are implementing, we believe provide a stable platform from which the company can navigate these challenging markets.
“I am grateful for the support of our existing and new shareholders and believe we are in a stronger position to take advantage of better market conditions as and when they come.”
The firm said its directors had considered its financial position, alongside the challenging market conditions and macroeconomic pressures continuing to impact investment activity in the UK as reasons to boost its capital position through the placing.
See also: Waverton appoints former WH Ireland director as CFO
Cost-cutting to commence
Prior to the issuing, WH Ireland’s cash levels had dipped below FCA regulatory capital requirements.
As required by the regulator, the wealth manager had drawn up plans for an orderly wind-down in order to protect consumers in case the company was unable to raise its regulatory capital to required levels.
WH Ireland said they would transfer clients to new advisors if such an event were to occur.
At the end of June, the company had cash of £3.7m, while its wealth management division held £1.34bn assets under management.
WH Ireland has confirmed it will commence a consultation regarding cost-cutting, including possible headcount reduction. The wealth manager said they hoped a wind-down could be avoided, with plans for pay cuts to senior staff also being considered.
The firm said the proceeds of the placing would help it to meet the FCA capital requirements and fund the cost-cutting exercise, which it hopes will provide a stronger foundation moving forward.
