DFS has said it is in “advanced stages” of negotiation with lenders over additional financing and is mulling the possibility of an equity raise as it battles to ride out the coronavirus storm.
In a note issued to the City this morning, DFS confirmed it was close to agreeing a deal with is lending banks to extend its existing £250m facility by an additional £60m to £70m.
Alongside extending its debt facility, DFS said it was preparing for a “possible non pre-emptive” equity issue of up to 19.9% of its existing capital.
The retailer said such a move would further strengthen its balance sheet and provide “resilience for a continued disrupted trading environment”.
The sofa specialist said it had also made further progress with regards to “reducing its monthly cash operating costs following positive discussions with suppliers and landlords” and said cash outflow was expected to be less than £14m per month.
The announcement also featured a trading update from the sofa specialist, which said its ecommerce arm had seen “strong momentum” and an increase in gross sales of 20.2% between March 25 and April 17.
DFS said it has in place all safety measures necessary to continue operating its distributions warehouse and intends to restart sofa deliveries once “it is clear there is a safe and workable approach for two-person installations into customer homes”.
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