IMF to raise $18m

Listed litigation funder IMF Australia has announced an $18 million capital raising to fund future litigation. The fundraising comes after the company rejected an offer for funding from an undisclosed US hedge fund, in favour of raising money through existing shareholders. IMF Australia executive director Hugh McLernon said the company was considering action in relation to Westpoint once the outcome of an Australian Securities and Investments Commission investigation was known, but would not disclose which other litigation actions the company was considering taking on."There are a number of very interesting funding opportunities on the horizon that would not be appropriate to take on without additional funding," Mr McLernon said. The funds include a non-renounceable rights issue of $13 million and a further $5 million through the placement of additional convertible notes. The $13 million raised by the rights issue will be used to fund new litigation funding agreements, for working capital purposes and to cover the costs of the issue. Any funds raised under the placement would be used to fund further litigation funding agreements. IMF funds large litigation actions on behalf of shareholders, companies and individuals, and in the case of a recovery by settlement or judgment, retains the entitlement to recover the cost of the action and an additional amount of the balance, estimated at up to 40 per cent in some cases. IMF is currently acting in several WA-based actions with a combined claim value of nearly $1 billion. This includes representing around 1,000 Sons of Gwalia Shareholders, technology company QPSX, and Timothy and Natalie Wright in a dispute against Wright Prospecting.