- Prachi Singh |
Mothercare Plc has announced that it is planning a fully underwritten equity issue to raise 32.5 million pounds (43.2 million dollars) from our existing shareholders at 19 pence per new ordinary share. The company also announced that since the CVA proposal in respect of Children's World Limited did not receive the required support from creditors, the company’s directors have decided to place it into administration, which will result in the transfer of 13 of its 22 stores to other Mothercare group companies to continue trading.
Commenting on the development, Clive Whiley, Mothercare’s Interim Executive Chairman, said in a statement: "This fully underwritten equity issue marks the end of this initial phase, returning the Group to financial stability. Whilst the lack of full approval for the Children's World CVA was disappointing, we have now found a solution which allows us to go further and faster with the right-sizing of our store portfolio."
Mother added that the completion of the Group's other CVA proposals and the administration of Children's World are expected to result in the exit from 60 UK stores and a continuing UK store estate of 77 stores for Mothercare as a whole by June 2019, with 19 of those stores on reduced rent.
"We have seen an unprecedented period for UK retail and we have not been alone in facing a number of strong headwinds. I'm pleased to say however, that we are now in a position to re-focus on our customers and improve the Mothercare brand both in the UK and across the globe," added Mark Newton-Jones, the company’s Chief Executive Officer.
Mothercare further added that the current trading continues to follow the patterns seen in the second half of the last financial year, with challenging conditions in the UK and some stability visible in its international operations.