Home shopping group Findel aims to raise £80.5m via a rights issue and share placing as it plans to restructure its balance sheet and bids to improve performance.
Findel, which owns online sportswear retailer Kitbag and gift store Express Gifts, will use £40m to cancel debt. It will also arrange new lending facilities. The changes are expected to cut net debt by about £110.5m and allow better operational flexibility.
The retailer admitted it had faced challenges in recent years, during which its profitability had plummeted. “This has stemmed from a combination of the effects of the group’s previous acquisition-led strategy, difficult trading conditionscity, the effect of introducing more prudent accounting policies and accounting irregularities in the education supplies division,” it said.
A full company review last year identified areas where Findel could improve performance. The retailer plans to invest £35m in the improvements, which would involve “a significant level of operational change” to all the group’s businesses and were expected to include changes to key processes. Group sales are slightly behind the previous year.
In the 17 weeks to January 28, aggregate home shopping sales fell 1.7%. Sales at Express Gifts fell 4.3% but Kitbag was up 18%.
Shareholders will decide on whether to approve the rights issue on March 15. Findel’s two largest shareholders, Schroder and Toscafund, have agreed to take up rights representing 34.8% of the issue.
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