MDCG Money Debt

RNS Number:7597N
Money Debt And Credit Group Plc
13 December 2006



This announcement is not for release, publication or distribution in or into the
United States, Canada, Japan, Australia or South Africa.


                          MONEY DEBT & CREDIT GROUP PLC
                                        
                                        
                              FIRST DAY OF DEALINGS
                                        
                                        
Money Debt & Credit Group PLC ("Money Debt & Credit" or the "Group"), the
provider of Individual Voluntary Arrangements, today announces the placing of
12,000,000 new ordinary shares of #0.10 per share at a placing price of #0.25
per share raising gross proceeds of #3.0 million, and its admission to trading
on AIM, under the symbol MDCG.


Money Debt & Credit's market capitalisation will be #10 million following
admission at the Placing Price. The placing has raised #3 million (before
expenses).


Solomon Hare Corporate Finance acts as Nominated Adviser to Money Debt & Credit
and Smith & Williamson Corporate Finance Limited as Broker.


Admission Statistics


Placing Price                                                25 pence
Number of new Ordinary Shares being placed on behalf of    12,000,000
the Group
Number of Ordinary Shares in issue immediately             40,000,000
following Admission
Market capitalisation at the Placing Price                #10 million
Gross proceeds of Placing Shares                           #3 million
Estimated net proceeds receivable by the Group           #2.5 million


Commenting on the placing and admission to AIM, Money Debt & Credit's Executive
Chairman, Simon Johnson, said:


"Admission to AIM is a significant and positive step for Money Debt & Credit as
we seek to become a dominant brand within the UK IVA market. The funds raised
put us in a strong position and allow us to actively pursue our aggressive
growth strategy which is backed by a strong management team and a robust
business plan."


Copies of the Admission Document will be available from the offices of Solomon
Hare Corporate Finance, Money Debt & Credit's Nominated Advisor, at Oakfield
House, Oakfield Grove, Clifton, Bristol, BS8 2BN, for at least one month from
Admission.


Further enquiries

Money Debt & Credit     Simon Johnson       01923 229 200

Smith & Williamson      Eric Boyle          020 7131 4761
Corporate Finance
Limited

Solomon Hare Corporate  Nick Reeve          0117 933 3344
Finance
                        Martyn Fraser

Cardew Group            Rupert Pittman      020 7930 0777   M: 07976 249289

                        Shan Shan
                        Willenbrock

                        William Scott-Gall



Overview:


   * The Group's principal business is the provision of Individual Voluntary
    Arrangements ("IVAs"), an insolvency procedure administered by licensed
    Insolvency Practitioners.


   * Introduced as part of the Insolvency Act 1986, the IVA has been designed
    as a practical method by which individuals struggling with debt are able to
    manage this burden and better manage their financial position, whilst
    avoiding personal bankruptcy.


   * The record level of unsecured consumer borrowing in the UK has led to
    the creation of a new sector of debt management companies providing
    solutions to individuals struggling to repay their debts.


   * Money Debt & Credit commenced trading in January 2006 and has rapidly
    grown its share of the IVA market. At 31 October 2006 the Group had 358 IVA
    cases under management, including 124 processed during October 2006.


   * Marketing and customer service are the fundamental drivers of the Money
    Debt & Credit business model. The management team have backgrounds in
    consumer facing businesses together with extensive experience of the media
    and advertising industries.


   * The Group's IVA cases are currently generated primarily through
    advertising on television, websites and in national newspapers. Significant
    focus has been made on creating a strong brand image with a view to Money
    Debt & Credit becoming a dominant brand within the UK IVA market.


   * Money Debt & Credit has also entered into a number of referral
    agreements with consumer facing organisations for the referral of potential
    IVA cases.


   * The level of consumer debt in the UK is at record levels having almost
    doubled since 2000. Statistics released in November 2006 confirmed the level
    of IVAs has continued to increase rapidly. In the third quarter of 2006 in
    England and Wales there were 12,228 IVAs, up 118 per cent. on the same
    quarter in 2005.


   * The Group has adopted internal compliance procedures to ensure that the
    business complies with current legislation, standards, guides and best
    practice. The Group's management has also initiated plans amongst the
    largest UK IVA providers to lobby for creation of a body to administer
    self-regulation of the sector.


   * The Group's non executive directors include the current non-executive
    chair of the Insolvency Service Steering Board.


Market Overview


* Debt in the UK


The level of consumer debt in the UK is at record levels having almost doubled
since 2000. At the end of 2005 debt attributed to mortgages, personal loans and
credit cards stood at #1.1 trillion. Consumer debt is reported to be increasing
at the rate of #1 million every four minutes. Against this backdrop the
Citizens' Advice Bureau reports that consumer debt problems have doubled over
the last eight years and accounted for three-quarters of the 1.25 million new
debt cases dealt with by the national network in 2005.


* IVA Market


As a consequence of this there has been a significant increase in the number of
debtors entering into statutory insolvency procedures in the UK. Over 70,000
individuals in the UK entered such procedures in 2005 which is twice the level
in 2000 and equates to approximately one every two minutes of the working day.


Increasing public awareness of an IVA as an alternative to bankruptcy has led to
a rise in both the absolute number of IVAs and the proportion of personal
insolvencies concluded by IVAs.


IVAs provide a number of advantages to debtors over alternative debt resolution
procedures. These include, but are not limited, to the following:


     o     avoiding bankruptcy and the perceived associated stigma and
           disqualifications, such as directorship;

     o     reducing the amount payable. It is common for creditors to forgive an
           element of the debt due upon setting up an IVA. In addition, interest 
           on outstanding balances is frozen upon approval of an IVA;

     o     providing certainty to debtors regarding the level and duration of
           payments. Any remaining creditors upon successful completion of the 
           IVA are legally prohibited from pursuing the debtor for the balance 
           of the original debt; and

     o     providing protection to the debtor from creditor recovery action. An
           approved IVA is binding on all creditors regardless of whether they 
           voted in favour of the proposal.


The principal advantage of IVAs to creditors is that they offer the opportunity
for higher levels of debt recovery compared to alternative procedures such as
bankruptcy.


Strategy


   * Marketing


The Group's IVA cases are currently generated primarily through advertising on
television, websites and in national newspapers. Significant focus has been made
on creating a strong brand image with a view to Money Debt & Credit becoming a
dominant brand within the UK IVA market.


   * Customer Service


The Group's initial contact with potential customers is generally through
customers making a telephone enquiry to its dedicated call centre team. The
Directors believe that this provides the key opportunity for the Group to
differentiate itself from its competitors and significant investment has been
made in both staff resource and training to ensure high levels of customer
service in this area.


Members of the management team have considerable experience of managing large
and successful call centres, including through periods of rapid growth.


   * Referral agreements


In addition to leads generated through the media, Money Debt & Credit has
entered into a number of referral agreements with consumer facing organisations
for the referral of potential IVA cases. The first such scheme commenced in July
2006 with Central Trust PLC, a leading UK loan broker. Similar agreements or
relationships have subsequently been entered into with three other
organisations, including The White Ensign Association for Navy personnel.


Such referral agreements are expected to become an important source of the
Group's future IVA cases, with a view to reducing the dependency on media spend
to increase market share. Furthermore, the Directors believe the existing
agreements endorse their strategy of providing a high quality, low cost service
to customers and enhance the Group's reputation as it seeks new referral
agreements.

ENDS


This announcement does not constitute, or form any part of, any offer or
invitation to sell, allot or issue, or any solicitation of any offer to purchase
or subscribe for, any securities, nor shall it (or any part of it) or the fact
of its distribution form the basis of, or be relied upon in connection with, or
act as any inducement to enter into, any contract or commitment for securities,
which should only be made on the basis of information contained in the admission
document issued in connection with the Placing.







DIRECTORS


Simon Johnson (Executive Chairman, aged 38)

Simon Johnson is the founder of Money Debt & Credit. Prior to this he was the
founder and majority shareholder of Data Locator, a company specialising in the
acquisition and supply of lifestyle data to the direct marketing sector. Under
his management Data Locator delivered rapid and profitable growth and was ranked
15th in the 2004 Sunday Times Fast Track 100. The company was sold in early 2006
to Promethean Investments plc for #23.5 million.


Simon Johnson has considerable experience within sales and marketing
organisations and prior to setting up Data Locator was sales director of ICD
Marketing, now part of Experian.


Jonathan Bartman (Managing Director, aged 33)

Jonathan Bartman was recruited by Simon Johnson to run Money Debt & Credit
having previously been sales director of Data Locator's call centre business.
Whilst at Data Locator he was instrumental in growing the size of its call
centre activities to 650 employees. Jonathan Bartman has extensive experience of
sales and marketing organisations having previously been employed at News
International, Conduit and ICD Marketing.


Gerard Kelly (Finance Director, aged 43)

Gerard Kelly joined Money Debt & Credit in November 2006. He has over 12 years'
experience as a finance director in a range of sectors. Most recently he was
finance director of Aventi Holdings plc, a pan European consumer electronics and
entertainment distribution company. Prior to this he held management positions
at Lloyds TSB and at Nordbanken in corporate banking and financial systems.


Gerard Kelly is an associate of the Chartered Institute of Bankers and a member
of the Association of Chartered Certified Accountants. He has a degree in
financial services.


Ian Holland (Insolvency Director, aged 57)

Ian Holland is a Chartered and Certified Accountant and licensed Insolvency
Practitioner. He has specialised in insolvency for over 30 years during which
time he has been partner in a number of specialist practices and has
successfully run his own insolvency practice for the last 12 years. Ian Holland
sits on many industry committees and is a respected authority in the corporate
and personal insolvency sectors.


Barry Gold (Non-Executive Director, aged 59)

Barry Gold is a solicitor with experience of acting for and being a director of
fully listed and AIM quoted companies. He was the senior partner of Gold Mann &
Co, a city firm of solicitors, from its founding in 1975 until he retired in
1998, remaining as a consultant for a further three years. He is currently a
consultant at Manches LLP, a commercial law firm operating in London.


Barry Gold is also the Chairman of Premier Management Holdings plc and a
director of Venture Six plc which are quoted on AIM and PLUS respectively. He
was also non-executive chairman of Cannon Avent Group plc at the time of its
#300 million acquisition by a private equity purchaser during 2005.


Graham Oates (Non-Executive Director, aged 56)

Graham Oates is a former managing partner and board member with KPMG Consulting
UK and has over 20 years' experience of consulting with a wide range of global
organisations on major systems' integration and business transformation
programmes. He is currently non-executive chair of the Insolvency Service
Steering Board.







                      This information is provided by RNS
            The company news service from the London Stock Exchange

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