Four specialists in rescuing troubled businesses are hoping to use their experience of the last recession in a new company they are floating on the Alternative Investment Market on Monday.
Resurge aims to offer help to troubled businesses that have potential during times of low economic confidence.
With the help of other financiers, such as banks and venture capitalists, Resurge plans to inject capital into beleaguered businesses and bring in professionals to turn the company around.
One of the four is ACCA-qualified accountant Jamie Constable, who explains: ‘Resurge will generate the deals, finance them and then bring in turnaround professionals to help the company out.’ Constable tells Accountancy Age that the idea for this company grew out of the last recession.
‘Because the economy was in such bad shape, we dealt with a lot of turnaround work until about 1993.’
He explains that, at the time, he built up his relationships with insolvency practitioners and other turnaround professionals. When the economy recovered, the turnaround work stopped. However, he says that with the new downturn, he began getting a lot of calls from his old contacts.
Among those callers was Jonathan Rowland, who works as a financier.
According to Constable, the two had been discussing turnaround work and thought: ‘Why don’t we turn it into a turnaround company?’
In selecting businesses to help, Resurge will put them through a rigorous selection process, sending in people to ‘kick the tyres’ of the company, seeing if the business has some potential and talking to advisers and experts in the troubled company’s sector.
If they decide to help, Resurge will then put in some capital, get others to invest as well, and put expert managers in to turn the company around.
Once the company has been turned around, Resurge will look for a return on its investment either by selling its stake to a venture capitalist, through a management buyout, or by floating its stake on the stock exchange.
Constable admits that the venture is not without risks. ‘There has to be risk for there to be return. But we are looking to reduce the risk to a minimum.’
‘We’ll have a spread of investments,’ he adds. ‘Getting involved in a company when it’s at its very lowest, the upside is there, but the downside is very limited.’
More information at www.resurgeplc.com
Placing price: 5p
Number of ordinary shares issued: 50,000,000
Estimated net proceeds of the placing: #2.3m
Market capitalisation at placing price: #2.6m
Advisers: ARM Corporate Finance
Anthony Brierley, non-executive chairman. Jamie Constable, joint managing director. Jonathan Rowland, joint managing director
A turnaround company that aims to support businesses which have suffered a setback, but still have the potential to return to financial stability and growth. The company was incorporated in July 2001 and will list on London’s Alternative Investment Market on Monday.
Just one half of UK practices have implemented a pricing structure around auto enrolment implementation and advice - with many suffering increased costs
Deloitte's north-west Europe foray; BDO, Smith & Williamson investment paths; Shelley Stock Hutter; and Wilkins Kennedy discussed by editor Kevin Reed on our Friday Afternoon Live broadcast
Accountants should alter their perspective on auto-enrolment to maximise business opportunities, according to Eric Clapton.
Kevin Reed discusses whether new accountancy group Cogital can rival the Big Four...and its likely direction of travel