Debenhams Group (AIM:DEBS), an online retail platform previously operating under the Boohoo Group name, has secured £40 million through an oversubscribed equity issuance, the company said on Thursday. The completed placing and subscription priced new shares at 18 pence each - a 5% reduction to the stock's closing price of 19 pence on February 17.
The fundraise was increased from an initial target of £35 million after stronger-than-expected investor demand. In total, Debenhams placed 200 million new ordinary shares and received subscriptions for an additional 22.2 million shares. After fees and expenses, net proceeds amounted to approximately £38.7 million.
Insider participation was a notable feature of the transaction. Chief executive Dan Finley subscribed for 833,333 shares, equivalent to approximately .15 million. Chairman Mahmud Kamani, together with close relatives and related trusts, subscribed for 44.4 million shares, representing .8 million. Major shareholder Frasers Group, which already holds more than 10% of the company's existing share capital, took up 59.7 million of the new shares.
The company also said that non-executive director Iain McDonald has stepped down with immediate effect to enable his participation in the raising; McDonald subscribed for 16.7 million shares, a commitment valued at .3 million.
Addressing the outcome of the placing, CEO Dan Finley commented on the implications for the group's recovery programme. He said the strong uptake underscores backing for the firm's multi-year turnaround strategy and that the proceeds will improve the group's capital structure, providing greater financial flexibility to execute the plan and generate value for shareholders.
"The success of the fundraise demonstrates the strength of support for our multi-year turnaround strategy. The fundraise will deliver an improved capital structure for the Group, providing us with greater financial flexibility to execute our turnaround strategy and deliver value for all shareholders," Dan Finley said.
The company indicated that the newly issued shares are expected to be admitted to trading on AIM around February 23.
This report presents the details released by Debenhams Group regarding the equity placing and subscription, the level of insider and major shareholder participation, the pricing terms, and the expected AIM admission timeline.