Home shopping group Findel has begun an £81m capital raising to help reduce debt and assist it with future growth.
The announcement came after the retailer revealed its delayed full-year results, in which underlying pre-tax profits fell from £50.6m last year to £33.4m for the year to April 3. Sales also dropped, from £610.6m to £599.8m for the period.
The retailer has confirmed it will issue 200 million shares by way of a firm placing and 204.3 million shares through a placing and open offer.
The move has also allowed the retailer to negotiate “less restrictive bank facilities”, according to chairman Keith Chapman.
Seymour Pierce analyst Freddie George said: “The capital raising programme will significantly dilute earnings but will ensure the survival of the business.”
To further pay down its debt, Findel has also completed the sale and leaseback of the head office of its educational supplies division for £9m.
Some analysts believe that Findel will now try to sell its healthcare division to concentrate on its core retail and education supplies business.