Healthcare Locums, the embattled medical recruitment group which suspended trading in its shares seven months ago, has been working on a 60 million Pounds fund-raising that could dramatically dilute existing shareholders' stakes.

In proposals seen by The Sunday Telegraph, the company has been looking to price a tranche of new shares at 10 Pence each, placing the majority of them with existing shareholder Toscafund. When the shares were suspended following the discovery of accounting irregularities in late January, they were trading at 112.5 Pence.
 
According to the documents, the company had planned to announce the fund-raising on 11 August 2011. Despite missing this deadline, the company issued a statement denying it had pulled the fund-raising, refusing to comment on whether a fund-raising was even taking place.
 
When asked to explain the documents seen by The Sunday Telegraph, a spokesperson again declined to comment. The company also denied talks had taken place with investment banks about taking on the company's 135 million Pounds of debt.
 
Under the fund-raising proposals, existing shareholders Toscafund and Ares Capital would invest 32.5 million Pounds and 10 million Pounds respectively. Retail shareholders would be offered a 4.4 million Pounds 'non-prospectus offering'.
 
Shareholders who did not take up the offer would see their stake diluted by more than 80 Pence. They would also see the value of their shares plummet to around 10 Pence, the price at which the fund-raising is set.

According to specialist publication ThisisMoney, a consortium of investment bankers appear set to buy out Healthcare Locums.

The banks, said to be major City players, are believed to be moving to buy HCL's outstanding debt at close to market value from two Australian banks. Commonwealth Bank of Australia and National Australia Bank are the company's largest lenders. Such a move would put the company beyond the reach of hostile takeovers.