Pepe plans new equity

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PEPE GROUP, the troubled jeans maker, is to raise fresh equity. It announced plans 'to increase the equity base' as it postponed for three months the payment of pounds 400,000 of preference dividends due yesterday, writes Patrick Hosking.

Pepe, advised by Rea Brothers, has not yet decided the form of the capital-raising, nor the amount of fresh equity needed.

Joe Sinyor, chief executive, said the capital was needed to invest in marketing and sales to strengthen the Pepe brand. It was not to pay off borrowings, which stood at pounds 14.5m on 31 March. No loan covenants had been breached, he said. Pepe's banks are ANZ Bank and Barclays.

The results to 31 March, already delayed, would be out 'some time at the end of August'.

Pepe shares, which were trading above 70p in June, fell 5p yesterday to 24p.