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Patient Capital's top stock demands £12.5m from Woodford

11 September 2019

Woodford Patient Capital's stake in Rutherford Health set to rise to 18% of net assets following latest fundraising, with 20% limit looming.

Woodford Patient Capital's (WPCT) top holding, proton beam operator Rutherford Health (RUTH.NXX), has demanded a further £12.5 million from embattled fund manager Neil Woodford as it continues to draw down on a £80 million funding commitment.

Rutherford Health, formerly known as Proton Partners International, is launching a fresh funding round through the planned issuance of new shares next Monday.

It will bring the amount the company has raised as part of an £80 million funding commitment agreed by Woodford Investment Management at flotation in February to £47.5 million.

Woodford Patient Capital is set to provide the funding, after Woodford ruled out follow-on investments in early-stage companies by his suspended Woodford Equity Income fund.

The fresh fundraising will take the trust's stake in Rutherford, which is already its top holding, to £118.5 million, or nearly 18% of net assets.

With Rutherford able to demand a further £32.5 million from Woodford under the terms of the commitment, the trust's stake could soon test the 20% limit set by the board on investment in any single company.

Options available to the manager to keep below the limit would include transferring the obligation to a third party or attempting to offload some of his existing shares.

The trust last week announced it had agreed to make no new investments without the prior consent of lender Northern Trust, which provides its £150 million credit facility. But consent has already provided 'in relation to certain existing commitments'.

The shares are being issued at £1.76 each, below the range of £2.10 to £2.45 at which they nominally trade on the NEX Exchange Growth Market. Only 155 shares have changed hands since the company floated in February. 

Recent Woodford Investment Management filings suggest Link Fund Solutions, administrator of all Woodford's funds, is valuing the shares at £2.

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