The company that owns third-party funder Therium is looking to raise £17m to invest in its operating platforms, nearly a quarter of which will go towards an international litigation funding joint venture.
An update from the City of London Group said it is looking at various options to raise the money, given that the “delays in the operating platforms achieving scale and the continuing delay in obtaining positive results from litigation cases in Therium” mean the group is likely to make an underlying loss before tax and not meet market expectations.
The company said Therium is “in advanced discussions with a US partner to form a new international joint venture fund, which contemplates the largest fund formation to date for Therium by an order of magnitude”. This would require further £4m equity capital from the group in support of the 50/50 joint venture
“Under the terms being discussed, Therium’s share of the joint venture profits would be expected to bring it to immediate profitability, earning it significant returns over the life of the fund.”
Eric Anstee, chief executive of City of London Group, said: “Whilst it has taken us longer to get the businesses to profitability than originally planned, we are pleased that after three years we have got the underlying platforms to a position where they are ready and have the opportunities to be scaled significantly to address the very attractive potential market opportunities ahead of them.”