Advisers hopeful of recovery after largest AIM issue since 2007

Hunton & Williams and Nabarro have acted on the largest rights issue on the Alternative Investment Market (AIM) since 2007.

Hunton advised longstanding client Faroe Petroleum on its planned £70m rights issue, the proceeds of which will go towards the drilling of up to eight new wells over the next eight years.

The Aberdeen-based oil and gas company also plans to apply for exploration licences in Norway, Greenland and the UK.

The fully underwritten AIM issue will be the largest for three years and one of the largest in the history of the UK's junior stock market.

The Hunton team was led by corporate partner Paul Tetlow. The US law firm has advised Faroe since the company was first admitted to AIM in 2003.

Nabarro took a role for the underwriters, Panmure Gordon and Oriel Securities, with corporate head Iain Newman leading the UK top 30 firm's team alongside corporate partner Gareth Jones.

Tetlow commented: "There has been a significant number of de-listings of smaller companies on AIM over the last 18 months. This has left AIM stronger and with a much higher average market capital. The support for the remaining stronger companies is good and when they are performing well and doing the right things they will be supported.

"We feel that the market is picking up now and by the autumn we expect to see more activity, with the added possibility of M&A coming back."

AIM has begun to show signs of recovery in recent months, with 16 admissions to the junior market up until the end of March, more than half of the number admitted throughout the whole of 2009.

In April, a Nabarro team acted for investment dealer Canaccord Adams on the £184.5m AIM listing of African iron ore company Bellzone Mining.