Boohoo trumpets bankers’ backing following recent fund raising

Embattled Manchester online fashion retailer, boohoo, said it has received backing from its bankers, following its recent placing and subscription and retail offers, announced on November 13.

The placing and subscription raised its target £39.3m, but the retail offer, which aimed to achieve £6m, only managed a disappointing £400,000.

Today (November 25), the group said it has received Lender Consent from its lenders under the Company’s Facilities Agreement.

It said following receipt of Lender Consent, the fundraising remains conditional only on (i) the placing agreement not having been terminated and becoming unconditional, and (ii) admission.

Application has been made to the London Stock Exchange for admission of 126,908,442 New Ordinary Shares to trading on AIM. It is expected that admission will become effective and dealings in the New Ordinary Shares will commence at 8.00am on November 26, 2024.

Dan Finley, CEO of boohoo, said: “Concluding the fundraising process and securing support from the banking syndicate is further evidence of the decisive steps that we have taken since announcing the business review.

“I now look forward to driving the business review forward and maximising value for all shareholders and the completion of this process gives us a great platform to do so.”

Chair, Tim Morris, said: “I’d like to take this opportunity to thank our banking syndicate for their continued support.

“As a result of their backing, we now have a strong foundation from which to unlock and maximise shareholder value for all shareholders.”

Boohoo is locked in a power grab with its largest stakeholder, Frasers Group, which wants to replace co-founder and executive chairman, Mahmud Kamani, with Frasers’ founder, Mike Ashley, the man behind the highly successful Sports Direct brand.

Last month Frasers, which holds a 28.1% stake in boohoo, called for Ashley  and Mike Lennon, of Frasers, to be installed on the boohoo board, replacing the then CEO John Lyttle, who had already announced his intention to step down.

Boohoo rejected the demand, installing internal appointment, Dan Finley, as CEO in a blatant snub. It has called a General Meeting for December 20, and urged shareholders to ignore Frasers’ demands.

Then, last Thursday, Frasers pressed its assault on the boohoo board with an open letter to its shareholders demanding the removal of Kamani, and asking shareholders: “A simple choice: win with Mr Ashley or lose with Mr Kamani”.

Frasers called for a separate meeting, saying: “Recent events at boohoo should leave shareholders in no doubt – Mahmud Kamani must go.”

The letter concluded: “Shareholders have lost money and there is justified disappointment with and distrust of the current leadership, in particular, Mr Kamani.

“With the appointment of Mr Ashley and Mr Lennon, boohoo has the potential to become a valuable and profitable business. Boohoo urgently needs a reset, and the upcoming Shareholder Meeting is your opportunity finally to unlock the company’s incredible potential.

“Join us in helping boohoo get back on track. Vote in favour of the proposed resolutions at the Shareholder Meeting.”

Boohoo’s shares have tanked over the past five years. In 2020 they stood at a 408.8p high, last Friday they closed at 30.62p per share.

The group has been hit by a series of issues with its suppliers. It faced an independent review in 2021 following claims of workers being paid less than the minimum wage.

Only last week it was reported that a Leicester clothing manufacturer is again supplying boohoo, despite being previously cast aside by the firm after the ‘modern slavery scandal’ of 2021.