Funding Circle SME Income Fund launches C shares offer

THE FUNDING Circle SME Income Fund has launched its first conversion (C) share fundraising as part of plans to raise additional capital over the next 12 months.

The placing is open until 6 April at a price of 100p per C share and the new class will list on the London Stock Exchange on 11 April.

Net proceeds will be used to purchase investments originated by the Funding Circle platform and some will be retained for working capital, a stock market announcement said.

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Richard Boléat, chairman of the SME Income Fund, said the intention would be for the C-shares to be converted into ordinary shares within nine calendar months.

“The company has achieved stable returns for ordinary shareholders, including dividend payments in line with the six to seven pence per share per annum target,” he said.

“The board is excited by the prospect of making further loans to small businesses in the UK, US and Continental Europe and is very pleased to offer existing shareholders and new investors an opportunity to invest in the company.”

The London-listed investment trust, which invests in loans on the Funding Circle platform, issued a new prospectus in February as it looks to issue up to 500 million new shares over the next 12 months.

Selling ordinary shares risks reducing existing shareholder holdings, while a C share provides a separate class that can be merged at a later date.

Outlining options in the prospectus, the investment company said it could offer ordinary shares, subject to permission from current investors, or issue C shares without having to first offer those shares to existing shareholders.

The investment company also this week announced a 1.625p dividend for current investors, to be paid to ordinary investors on 28 April.

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