Amber Day pounds 15m equity issue tipped

AMBER Day Holdings, the troubled retailer, is today expected to launch a pounds 15m equity issue to reduce debts and finance a big expansion, writes Neil Thapar.

The plan emerged as Amber announced David Thompson was stepping down as chief executive after a year in the job.

The company was widely expected to launch a rights issue last month when it reported a pounds 2.1m full-year loss and slashed the final dividend. But the cash call failed to materialise, raising doubts about the group's future.

However, market sources said yesterday that it had received backing for a refinancing which could result in Warburg Pincus, the investment bank that owns 12 per cent of the company, substantially increasing its stake.

The new funds will be used to cut the group's pounds 7m debts and expand What Everyone Wants, its discount chain, which boosted sales by 14 per cent in the four months to 30 November. Like-for-like sales were up 3 per cent.

Mr Thompson replaced Philip Green, the former chairman and chief executive forced out by institutional shareholders. Mr Green was granted a pounds 1.1m payoff but his successor will receive no money.

Peter Carr, chairman, said Mr Thompson was leaving because he did not wish to relocate to the new head office in Glasgow.