Electricals giant DSGi is reported to be preparing for a rights issue to raise hundreds of millions of pounds for its struggling business.

Chief executive John Browett will not make a decision as to whether to to pursue capital raising until after he has held discussions about the disposal of some of DSGi's overseas businesses, according to the Sunday Telegraph.

The proceeds from any sale would be used to rollout DSGi’s larger-format Currys stores.

Browett is also reported to be looking at renegotiating the group’s borrowing covenants with the banks.

DSGi has been one of the worst hit retailers since the downturn began. In the 12 weeks to January 10 it reported a 10 per cent fall in like-for-like sales.