The group is to open at least 50 stores by October, bringing its total to 120. The new stores will be in Scotland although it intends to expand into England later this year.
The expansion programme is expected to cost about pounds 25m. At 31 October last year, debt was pounds 19m. After the fund-raising, it is predicted to fall to about pounds 14m by this October.
The preference shares mature in 2009 and carry an interest rate of just under 8 per cent.
Shoprite has grown rapidly since it was launched in 1990. Pre-tax profits are expected almost to double from pounds 4.8m to pounds 9m in the year to October. Its shares dropped 2p to 239p yesterday. Deryck Nicholson, chairman and joint managing director, said: 'The growth of discounting in the UK is accelerating and we think we have the format which will allow us to compete.'
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