Findel confirms balance sheet restructuring
EMBATTLED home shopping and education supplies business Findel has announced that it is planning to raise £80.5m in a bid to restructure its balance sheet.
The business, which recently relocated its operational HQ to the home of its educational supplies division in Tameside after moving from Burley-in-Wharfedale in West Yorkshire, plans to raise £80.5m through a rights issue and share placing.
It has also agreed a new five-year deal with its bank for a new £196.8m revolving credit facility.
It is paying a 3% margin on the loan, which it said would also offer the company “greater operational flexibility”. The bank will also provide a new £105m securitisation facility.
The company will issue more than 1.2m new shares, offering investors a five for two rights issue at a price of 6.54p a share, which is a discount of 51.6% on yesterday’s closing price of 13.5p. The rights issue has been underwritten by JP Morgan. Some £40m of the cash raised will be used to pay existing debt.
Findel, which also owns Middleton-based sportswear retailer Kitbag, said the restructuring would “significantly strengthen the group’s financial position”.
Chairman David Sugden said: “Following completion of this restructuring, Findel’s new management team, clear operational strategy and stronger capital base leave the Group well positioned to deliver value for shareholders and strengthen its market position.”
The company also announced that in the 17 weeks to January 28 sales were lower than last year as a result of the poor weather in the run-up to Christmas.
The firm said sales at its Home Shopping division dropped by 1.7%, with sales at Express Gifts dropping by 4.3% and at Kleeneze by 9%. Kitbag had a record month in December, though, and its overall sales for the period were up 18%.
The company’s Education Supplies division was badly hit by the snow, with school closures contributing towards an 11% drop in volumes.
“In the short term the Group’s business continues to face a number of challenges, both in maintaining supply chain effectiveness given current financial constraints and the more general external economic environment,” the company said.
“However, the proposed financial restructuring announced today will provide the Group with the secure funding base and capital availability required to implement our Full Potential Review programme.”
