27th Oct 2014 07:43
LONDON (Alliance News) - Mother and baby products retailer Mothercare PLC Monday said its received valid acceptances for roughly 94.6% of its recent rights issue, money it will use to help it try to return its UK operations to profitability.
Earlier in this month, Mothercare said its shareholders had approved its heavily discounted GBP100 million rights issue - a 9-for-10 offer at 125 pence per share. Mothercare shares closed Friday at 1790.00p.
Mothercare said Monday that out of the 79.94 million shares from the rights issue, over 75.6 million shares were taken up.
The retailer has been struggling in the UK in the face of tough competition, particularly from online competitors, and amid criticism of its stores and customer service. It has been closing stores to cut costs, and want to invest in modernising others as well as in new IT systems in an effort to become a "digitally-led" business.
Last month, Mothercare said it would be using around GBP25 million of the rights issue proceeds for store closures, GBP20 million for its store refurbishment programme, GBP10 million invested in digital systems and infrastructure, and GBP40 million to repay its existing term loan.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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