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High Street

Carpetright to issue shares to raise £60m fund ahead of CVA

Carpetright is to launch a proposed share issue in order to raise around £60m to help fund its restructure and recovery plans.

The carpet retailer is planning to issue off 232,463,221 new ordinary shares by way of a placing and open offer at a price of 28 pence per new ordinary share. The issue price represents a discount of 15.8% on the closing price of 33.25 pence per ordinary share on 17 May 2018.  

It is understood that around £6m will be used to cover the costs of a Company Voluntary Agreement (CVA) that its creditors agreed last month which will close around 92 stores.

Another £12.5m is for the repayment of the principal amount of the short term unsecured loan from Meditor which Carpetright entered into on 21 March 2018. Around £33m will also be used to fund the company’s capital expenditure.

Carpetright announced that the placing and open offer is conditional on it being approved by shareholders at a general meeting to be held on 6 June. If given the go-ahead it is expected that the placing will take place at 8am on 8 June.

Wilf Walsh, CEO of Carpetright said: “We are delighted to have received such strong support from our shareholders and other investors in achieving this fully underwritten fundraise. The £60m proceeds from the Placing and Open Offer will give us the resources we need to complete our restructuring and accelerate our recovery plan.

“As well as funding implementation of the CVA to create a right-sized estate of stores on sustainable rents, it will provide the necessary capital to refurbish and modernise the ongoing store estate and to upgrade our digital platform – both vital investments in our future. We believe that a recapitalised market leader will ultimately be better for customers, suppliers, landlords and shareholders.”

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