Oakman Inns completes £5.5m fund-raising: Oakman Inns and Restaurants, led by Peter Borg-Neal, has completed a £5.5m fund raising. Borg-Neal said: “Fund-raising is always terribly difficult and never more so than during a recession. Our task was made even more difficult, by the fact that we had an unsupportive bank in RBS, whose behaviour towards ourselves and others, will almost certainly result in further future news. We started looking for funds in April of 2012 and received a number of offers from various private equity sources. However, none of the offers reflected the fundamental value of our business and, despite the pressure, I was determined not to sell out too cheaply. The decision by the Government in the 2012 Autumn Statement to extend the Enterprise Investment Scheme provided the opportunity we needed. In February this year we launched a new EIS fund-raising round. Our initial target was £4.5 million, but due to impending acquisitions we upped the target to £5.5 million. The entire sum was finally realised on 29 November. All the funds taken in are either straight-forward equity or shareholder loan notes. In addition, all existing loan note holders agreed to novate their agreements for another three years. This leaves the business with a very strong balance sheet with circa £7 million of equity, £3.9 million of shareholder loans and only £1.2 million of bank debt (all of it secured via EFG and freehold property). We believe the value of the business, net of debt is around £15 million and our freehold property alone is worth over £7 million. Going forward, we will look to gradually leverage the value of that freehold property whilst maintaining a cautious approach to debt.” In addition, Joseph Evans, currently financial controller of Whitbread’ hotel and restaurant division, will be joining Oakman Inns as a board director in February. Borg-Neal added: “In his thirteen years at Whitbread he has gathered a huge range of experience and has been instrumental in the success of that business. He currently leads a team of 110 people in the division which has an annual turnover of c£1.4bn, profits of c£320m, net assets of c£3bn across 1,500 locations, circa 25,000 employees, is growing by 10% new space every year and is making payments of c£1bn per annum. The fact that he is leaving such a major post to join us for the next part of his career is testament to the esteem with which Oakman Inns is held across our industry and the very exciting future we are building towards. Joseph shares my vision of building a ‘best in class’ business that can deliver a tremendous outcome for investors, employees, suppliers and customers alike. Earlier this year we opened the sixth Oakman Inn. The Beech House in Beaconsfield which has proven an instant success and has smashed its targets. The £800,000 investment there was rather dwarfed by the £3.5m costs associated with the acquisition and development of The Crown & Thistle in Abingdon-on-Thames. At times this has looked like an acquisition too far, given our funding challenges and the very intricate (and expensive) nature of the development project. However, due to the amazing support of our investors, we have fought our way through and the end result is stunning. It is very early days from a financial perspective but the initial numbers look very exciting.”