Multi-sector recruiter Kellan Group has entered into an arrangement agreed to borrow £600k from its largest shareholder. 

Under the arrangement announced to the City today, Kellan is borrowing £600k from Paul Bell, who holds 41.77% of the shares in the company. 

The funds will be used as interim capital pending a refinancing of the company, who earlier this week saw its chief executive officer Ross Eades step down.

Another senior Kellan executive, Lynne Hardman, left the company at the end of last year, Recruiter has learned. Hardman was managing director of Kellan brands RK Accountancy and Quantica Search and Selection.

Rakesh Kirpalani, Kellan Group’s group finance director, tells Recruiter: “There is nothing sinister about it [the arrangement] – it is actually quite positive.”

Kirpalani says that while the company does have a facility to borrow money from its bank, it did not approach the facility because the 4% interest rate on the loan from Bell is “extremely attractive”.  

“I would be surprised if a bank would be able to match it,” he adds. “The good news for the company is that it has some great prospects and that we have been able come up with this facility relatively quickly.

“The great message is that we have a very supportive shareholder.”

A City analyst, who covers the staffing sector, but does not wish to be named, tells Recruiter that he “cannot think of any other examples where a staffing company has entered into such an arrangement”.