Better Capital shareholders to share £14m in windfall

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Venture capitalist Jon Moulton’s investment vehicle, which is in talks to rescue coal miner ATH Resources, has unveiled plans to return £14.1 million to investors.

Better Capital said shareholders in its 2009 cell were in line to receive a cash payment of 6.8p per share on 8 March, marking the first distribution of capital from the fund.

The 2009 cell is a “feeder fund” that invests its proceeds in Better Capital’s Becap fund, which recently spent £15m buying up ATH’s debt. The Aim-quoted holding company for the miner – which is based in Doncaster but has all five of its open-cast mines in Scotland – was placed in administration last year.

Following the purchase of ATH’s debt, Better Capital tried to broker a deal to buy the business but agreed a two-month “standstill” period to give management a chance to restructure the balance sheets without a change of control.

The Becap fund owns Reader’s Digest UK, which last month laid off 95 people following a slump in demand at its direct marketing arm, although the magazine continues to be published.

In a trading update, the investor said: “Better Capital’s focus on improving operating margins, reducing costs and improving working capital mean that most portfolio businesses are making sold improvements in profitability and cash generation.”

Others in Better Capital’s portfolio include double-glazing firm Everest and fashion retailer Jaeger. It said Everest was performing well amid difficult market conditions while Jaeger was on track to narrow its losses.