Cupid unwraps finance package

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CUPID, the bridalwear and formalwear group, yesterday disclosed a refinancing package led by Richard Shaw, a non-executive director.

Mr Shaw, who is currently group development executive of Stephen Barker's Hartstone Group, is to take over as chairman and chief executive, after raising pounds 1.9m in a subscription and rights issue.

Following a profits warning last week, the company - which owns the Pronuptia bridalwear and Youngs formalwear businesses - announced yesterday that its losses for the year to 31 March will be not more than pounds 1.5m.

Mr Shaw said the proceeds of the share issue would reduce bank debt, finance restructuring and strengthen the balance sheet of Cupid, which is traded on the Unlisted Securities Market.

He added that gearing would stand at about 25 per cent following the issues.

Mr Shaw, his family interests, and two other Cupid directors are subscribing for pounds 2.3m new ordinary shares at 28p each. The four- for-nine rights issue, which is underwritten by Wise Speke, is also at 28p.

The current chairman and chief executive, Richard Lee, is to leave the company. He took over in an executive capacity when the group's founder, Michael Murray, resigned last year.

Mr Shaw said his strategy would be to reduce the group's directly owned Pronuptia and Youngs retail outlets, partly through franchising. He aims to expand the business by acquiring lingerie companies.

Cupid shares rose 7p to 53p.