Electricals group DSGi has unveiled plans for a £310.6m rights issue and share placing.

Cash raised will be used to fund the retailer’s renewal and transformation plan, strengthen its capital base and underpin its finances “to provide comfort to the group’s suppliers and their credit insurers”.

The retailer, owner of the Currys and PC World chains in the UK and a raft of European operations, has also renegotiated a £400m revolving credit facility and £75m letters of credit.

DSGi accompanied the news with a trading update showing an 11 per cent fall in group like-for-likes in the 26 weeks to April 18. Comparable store sales slipped 12 per cent at the UK and Ireland electricals division, 14 per cent in UK computing and 10 per cent in the important Nordic markets. In southern Europe DSH recorded a 15 per cent like-for-like sales fall. Underlying pre-tax profits for the year ending this Saturday will be at least £42m and the underlying profit, before tax losses, from business to be shut – Markantalo and PC City Sweden – will be not less than £30m.

DSGi chief executive John Browett said he was “extremely encouraged” by the results so far of the renewal and transformation plan and its continued roll-out is essential to future success.

Browett said: “We believe that the combination of the share issue and the amended bank facilities announced today strengthen the capital structure of the business and provide the flexibility to invest in the renewal and transformation plan at a faster pace that positions the group to emerge from the downturn in a stronger position.

“The refinancing also leaves us well positioned to provide reassurance to our trade suppliers and their credit insurers with regard to the group’s capital position.”

DSGi will raise £100m through the issue of new shares at 30p each, a 20 per cent discount to yesterday’s closing price.

A five-for-seven rights issue will raise £210.6m through shares at 14p each – a 40 per cent discount to the “theoretical” ex-rights price when calculated by reference to the placing share price.