Mothercare plans new equity fundraising
Struggling Mothercare is expected to announce this week that its solution to its funding problems will be to try to raise more cash from existing shareholders.
The company is reported to be looking at getting tens of million of pounds from the biggest names on its shareholder list as it battles for survival under its still-new CEO David Wood.
It’s believed that news of the equity share placing will come alongside its full-year results and wider rescue plan details later this week.
The Telegraph reported that the company is also likely to become the latest UK name to enter a company voluntary arrangement (CVA), allowing it to close stores and negotiate lower rents for remaining locations.
The company has around 1,300 stores globally and a CVA would see it become the latest British retailer this year to follow that route. New Look has also take the same approach as it plans to close a raft of stores and House of Fraser will do so next month as part of the deal with its new majority owner. Mothercare is reportedly planing to close up to a third of its UK stores.
So what else should we hear from Mothercare this week? Well, analysts expects its profits to plummet by as much as 95% to just £1 million. Its annual results are out on Thursday.
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