Online retailer Debenhams recently announced that fundraising has generated gross proceeds of approximately £40m after being oversubscribed.
Debenhams, formerly called Boohoo, had originally hoped to raise £35m to create an “optimal capital structure”. However, “following investor demand significantly in excess of £35m”, Debenhams said it has “upscaled the fundraise”.
Debenhams chief executive Dan Finley said: “We are pleased with the strong level of support from new and existing shareholders. The success of the fundraiser demonstrates the strength of support for our multi-year turnaround strategy.
“The fundraiser will deliver an improved capital structure for the group, providing us with greater financial flexibility to execute our turnaround strategy and deliver value for all shareholders.”
As a result of the fundraising, Iain McDonald will step down from his role as a non-executive director of Debenhams and chair of the remuneration committee with immediate effect. Boohoo said: “This will facilitate participation in the fundraiser by certain funds managed by Iain.”
McDonald said: “It has been a pleasure to be a non-executive director at Debenhams over the last nine years, and I am delighted to support the company in the fundraising.
“This should be viewed as a measure of how much I believe the current market valuation of the business undervalues its prospects. Dan has transformed the cost base and business model since being installed as chief executive, and with the re-basing of the business to a profitable core now largely complete, the prospects for strong growth and cash generation are the best for many years.
“I have confidence in the board and wider management team in delivering its turnaround. I look forward to watching the continued momentum of the business as a supportive investor.”
Finley and Boohoo co-founder and executive vice-chair Mahmud Kamani both participated in the fundraiser.
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