Mothercare has revealed the results of its strategy to raise £32.5 million through issuing new equity to existing shareholders as part of its CVA.
The maternity and babywear retailer said that through the issuance of 170,871,885 new ordinary shares by way of a placing and open pffer at a price of 19p per share, investors have taken up 77.9 per cent of the shares on open offer.
The remaining shares will be taken up following the placing, after relevant resolutions were approved at Mothercare’s general meeting today.
When the retailer unveiled its CVA plans in May, it said revised debt facilities of £67.5 million which remained conditional upon, among other things, on the the completion of the equity raised through the placing and open offer.
Further details of the CVA, which was approved by Mothercare creditors in June, included around 50 stores earmarked for closure by June next year and 800 job risk placed at risk.
Earlier this month, this was updated to total of 60 store closures from across the Mothercare group and potentially 900 job losses, after the Childrens World fascia fell into administration.
The embattled retailer said it was faced with a “bleak future” ahead of the restructuring and had more work to do.
Once the CVA process was complete by June next year, its UK estate will have 77 stores, with 19 of those stores on reduced rent.
Mothercare also hoped to achieve savings of £19 million through the store closure process, and hopes to realise £10 million in cash.
Interim executive chairman Clive Whiley said: “Earlier this year Mothercare faced a bleak future with growing financial stress upon the business and in May we announced a series of measures to refinance and restructure the business.
“Conditions in the retail sector remain challenging and we know we must adapt with pace as we move forward.
“We are clear about what needs to be done and have targeted significant efficiencies and cost savings, as well as areas of investment, both of which will underpin our return to a sustainable future.”