Loss-making equipment leasing specialist St Helen’s Finance has launched £2 million of 8.5 per cent convertible loan notes.

Loss-making equipment leasing specialist St Helen’s Finance has launched £2 million of 8.5 per cent convertible loan notes.

Rivington Street Corporate Finance is helping PLUS-quoted St Helen’s with the issue of the loan notes, which are convertible into shares at 9.5p, against today’s mid-market price of 9.25p. St Helen’s, which won the 2008 Growth Company Investor PLUS Company of the Year Award, is planning a new legal sector product and wants £250,000 of the money it seeks to fund its launch.

Managing director Norman Kenvyn sounds bullish about market reactions to the convertible issue. An 8.5 per cent coupon may look high compared with a UK base rate of 0.5 per cent, but he points out that it is lower than what St Helen’s charges its small company clients when financing their core assets.

The company reduced its pre-tax loss by nearly £100,000 to £217,200 last year on turnover up 72 per cent to £1.3 million. Kenvyn says the first six months went well, but the second half-year saw a deterioration in the market.

This showed through in a loan loss provision swelling administrative costs by nearly a third to £1.1 million and an 80 per cent increase in interest payable to £459,300. Kenvyn says St Helen’s is now striving to ‘realign itself into recession-proof sectors’, of which the new legal product will be one and care homes may be another.

Floated on PLUS six years ago at 11p, St Helen’s shares are now quoted at 9.25p (with a 1.5p spread).