The move, revealed exclusively in the Independent earlier this week, involves the issue of 29.1 million new shares. Of these almost 6 million are being subcribed for by Warburg Pincus, the investment bank that owns 17 per cent of the company, at 58p a share.
Another 23.3 million are being placed at 56p each with institutional investors including Warburg Pincus, lifting the bank's stake to 25 per cent. However, the one-for- five subcription offer is also available to other shareholders.
The company, which is changing its name to WEW Group, said the proceeds would strengthen its shareholders' funds, which fell from pounds 20.4m to pounds 9m in the year ended 31 July.
In addition, it plans to double the number of shops in What Everyone Wants, its discount chain, to about 125 over the next five years.
Its bankers have agreed to provide committed borrowing facilities of pounds 10m conditional on completion of the equity funding.
'In the directors' opinion this level of shareholders' funds is inadequate to support the company's existing business and its expansion plans, particularly given seasonal fluctuations in its borrowings,' Amber Day said.
'The board believes that these arrangements will ensure that the group has a stable financial base for the successful expansion of the What Everyone Wants business.'
The announcement came after the market's close, leaving the shares unchanged at 63p.Reuse content