Blacks Leisure has taken another step in its turnaround plan with a proposal to raise £20.3m through a placing and open offer.

Funds generated will be used to open new stores and enable the outdoor specialist to refit its existing shops, some of which have not been updated for many years.

The new cash will also be used the cancel the group’s seasonal peak working capital facility of £7.5m.

The issue price of the new shares is 54p, a discount of 4.4% to the closing price the day before the announcement.

Blacks chief executive Neil Gillis said the fund raising proposal would enable Blacks to “pursue the crucial growth phase” of its recovery plan and would help with the planned expansion of up to 35 new stores.

He added it would also “accelerate the refurbishment of our core estate, which has suffered from years of underinvestment”.

Seymour Pierce research analyst Freddie George said: “Though early days, this looks to be one of the few credible retail restructuring stories.”

Blacks successfully completed a company voluntary arrangement (CVA) in November allowing it to exit the leases of 89 stores.