July 2 (Bloomberg) -- Intermediate Capital Group Plc, a London-based backer of leveraged buyouts, said it plans to raise 351 million pounds ($576 million) in a rights offering to allow it to fund new investments.

Investors will be offered seven new shares for every two they already own, the company said in a statement today. The firm plans to issue 302 million shares at 121 pence, 74 percent less than yesterday’s closing price.

“The extraordinary state of the credit markets, the absence of liquidity in the banking sector and changes in the competitive landscape have provided ICG with significant opportunities to invest,” Managing Director Tom Attwood said in the statement.

Intermediate posted a full-year loss of 73 million pounds last month, the first since the company started in 1989, after provisions for bad loans climbed. The company forecast lower provisions for bad debts this year and is considering making a bid for the European assets of U.S. private equity firm American Capital Ltd., Attwood said in an interview June 2.

The stock rose 15.5 pence, or 3.2 percent, to 505.5 pence. That pares this year’s decline to 21 percent and gives the company a market value of about 436 million pounds.

Intermediate Capital will use the money raised to extend loans for leveraged buyouts and to buy existing debt from other investors. The company said it also will seek to refinance companies in which it already invested. Investors will vote on the plan on July 20.

Management Confident

“Management has talked confidently and consistently of the attractive market opportunities,” Rae Maile, an analyst with JPMorgan Cazenove Ltd. in London, wrote in a note to clients. “The capital raising per se is unlikely to surprise, though the scale of investment opportunity envisaged by the company is perhaps greater than the market had anticipated.”

The rights offer is being underwritten by Cazenove, Royal Bank of Scotland Group Plc’s Hoare Govett Ltd., Credit Suisse Group AG, Lloyds Banking Group Plc and HSBC Holding Plc.

In a separate statement, Intermediate said its portfolio is “broadly resilient.” Of the top 20 assets accounting for about 45 percent of the portfolio, only three are underperforming, the company said.

Intermediate said it negotiated the extension of 395 million pounds of its bank debt until 2013. The company also extended a 150 million-pound banking facility this month.

To contact the reporter on this story: Andrew MacAskill in London at amacaskill@bloomberg.net

Last Updated: July 2, 2009 12:36 EDT