Struggling outsourcing group Mouchel has said it is considering a “significantly dilutive” equity fundraising, in order to restructure its balance sheet.
Mouchel, which runs a number of education and children’s services contract, said it is looking at all options to address the capital structure of the group.
The announcement came as the group reported a pre-tax loss of £11.6 million in the six months to 31 January (2010: £1.5 million), on flat sales of £270 million.
Meanwhile, net bank borrowings rose to £104.1 million, from £96.9 million in the previous year.
In the past 12 months the group has been hit hard by a combination of management changes, failed takeover bids and tough trading conditions.
Group shares, which have fallen 90% in the past twelve months, dropped more than 18% on Thursday following the announcement of a possible fundraising.
The group has appointed Goldman Sachs to advise on the restructuring.