Towergate puts £665 million capital raising on hold

Towergate Partnership, the parent group of IFA national Towergate Financial, has put on hold plans to raise £665 million, blaming a deterioration in the public debt markets.

Towergate said bond market conditions had taken a turn for the worse, meaning it was no longer cost-effective to carry out the offering.

The company had announced in April it intended to offer corporate debt to the market through its subsidiary Towergate Finance. It offered £365 million of corporate debt that would pay out in 2017, and £300 million that would pay out in 2018. Part of the money had been earmarked for acquisitions.  

Andy Homer, group chief executive of Towergate, said: 'We intended to take advantage of the favourable bond market conditions to refinance the group’s existing debt facilities and to provide additional funding for future acquisitions.

'Bond market conditions have obviously worsened significantly since we launched the offer and, for the moment, it is not cost effective to pursue the offering.'

Homer said his company, which had planned to use the proceeds of the revenue-raising exercise to redeem some Towergate preference shares, would consider returning to the markets again when conditions improved.

Towergate added yesterday that it had 'no immediate need to refinance' following the renegotiation of its debt facilities in 2009.