A total of 49,019,610 new ordinary shares of two pence each will be made available, at a price of 102p per placing share, subject to a resolution to subdivide each of the company's existing ordinary shares of 10p each into five ordinary shares of 2p each being passed at Spice's annual meeting later today.

The placing, which will raise approximately £49m after expenses, has been underwritten by KBC Peel Hunt.

Spice, which successfully concluded its move up from AIM to the Official List at the end of July, said the placing was expected to marginally dilute earnings per share (before amortisation of intangible fixed assets and exceptional items) by approximately one per cent in year ending April 30, 2010.

The company confirmed the proceeds would be used to reduce current levels of bank debt. The placing was expected to improve the ratio of debt to earnings before interest, tax, depreciation and amortisation (EBITDA) and enhance interest cover.

The company said the admission of the placing shares to the official list and to trading on the London Stock Exchange was expected to take place on September 30.

Today's announcement came as Spice said it had started the new financial year well, building upon record results reported for the year ended April 2008.

Trading for the period to July 31 was in line with the board's expectations.

Spice said: "Trading conditions within our electricity and energy markets remain particularly favourable where we have continued to make good progress."

A statement from the firm added: "Within the current economic environment, efficiency is becoming a key driver for our commercial clients.

"We believe that the group is well placed to innovate in order to maintain and to win market share in this tougher environment. The economic environment is also giving rise to a number of attractive acquisition opportunities, in particular within our electricity and energy markets, which we are seeking to develop and exploit."

The group's operations were founded in 1996 and have their origins in the electricity industry, though the range of activities has since been expanded into the water sector, niche telecommunications services, statutory gas inspections, energy management and facilities management.