Unbound board eyes equity fundraise and break-up after sale process ends with no offers
Directors of troubled shoe maker and ecommerce business Unbound are considering an equity fundraise of between £1.5 million and £2 million.
In a sparse statement to the markets this morning the board of the business best known for its Hotter Shoes brand said it had formally closed its sale process after receiving no offers that the board “considered capable of receiving shareholder and wider stakeholder support”.
The Skelmersdale, West Lancashire headquartered company is in talks with its bankers regarding potential and expected breaches of its loan covenants and any deal would have to be acceptable to them, which has also created “liquidity constraints” and the company needs the bankers to waive “certain covenants under existing borrowing facilities”.
Turnaround experts Interpath are still advising the board on a strategic review process in respect of the Group’s main operating subsidiary, Hotter Shoes, which could be sold off separately.
This morning’s statement outlined the options for a cash injection to support any restructuring plan.
“In light of the recent encouraging trading performance of the Group, as an alternative to the indicative proposals being progressed as part of the strategic review, the Board is also assessing the feasibility of an equity fundraise of between £1.5 million and £2 million to support implementation of a formal restructuring plan, with a view to securing a better outcome for the Group,” the statement said.
“Should an equity fundraise be progressed, the Board intends to include an open offer element to enable participation by the Company’s wider shareholder base on equal terms.”
On a brighter note the board claimed a 9% cost savings have worked.
“EBITDA (pre-IFRS 16) of approximately £1.1 million for April and May combined, an EBITDA margin of 14%, an improvement from 9% in the prior year period. For the first four months of the financial year, the Group is at EBITDA breakeven,” the statement concluded.
