TELEVISION group Maverick Entertainment is issuing £2.1m in new shares, to fund a comeback by a former children's favourite.

The company is raising funds to bring back Muffin the Mule.

The puppet is set to return to screens as a cartoon character in autumn 2005 - in time for his 60th birthday.

Maverick, which also owns the UK rights to the cult cartoon series the Moomins, said the animated Muffin will live on an urban farm on the new BBC series. Finance director Sookra Raveendran said: "We are going to put Muffin in a contemporary setting with contemporary, fresh storylines."

Mr Raveendran added that the company would use some of the proceeds from the cash call to develop its existing video and DVD distribution business.

The group, which is based in Thame, Oxfordshire, announced half-yearly pre-tax losses of £320,412 yesterday, after an overseas distribution deal expired and turnover fell by more than half.

But Mr Raveendran said a new distribution deal was in place and would help the group plug the gap ahead of revenues from the return of Muffin the Mule