Banks cream off huge fees as small firms raise cash

Smaller companies were raising money in the City today - and paying dearly for the privilege.

Hi-spec nuts and bolts distributor Brammer said it is to raise £38.3 million in a rights issue with its shareholders.

However, £3 million of that - nearly a whopping 8% - is to go to its City advisers led by Royal Bank of Scotland's stockbroking arm Hoare Govett.

The one-for-one rights issue is being priced at 72p a share, a 57% discount to last night's closing price.

Brammer needs the money to cut its debts and allow it to start borrowing again within the terms of its overdraft facility.

It recently reported that sales were declining at a rate of 20%.

Estate agent Colliers CRE said it has raised £20 million through a placing and subscription for new shares though £1.6 million - or 8% - is going to advisers headed by Panmure Gordon.

US property agent FirstService is taking up nearly half the shares and will now control 29.9% of Colliers.

The shares were offered at 20p - almost a 50% discount to last night's close.

The refinancing, according to Colliers' chairman Sir John Ritblat, comes after "very difficult circumstances over the past 18 months."