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LONDON (Alliance News) - Mothercare PLC Thursday said its shareholders approved its heavily discounted GBP100 million rights issue.
The mother and baby products retailer announced the 9 for 10 rights issue last month at 125 pence a share, money it will use to help it try and return its UK operations to profitability.
In a statement Thursday, the company said 99.89% of shareholders who voted at a general meeting voted in favour of authorising its share issue and disapplying pre-emption rights.
Mothercare has been struggling in the UK in the face of tough competition, particularly from online competitors, and amid criticism of its stores and customer service. It has been closing stores to cut costs, and want to invest in modernising others as well as in new IT systems in an effort to become a "digitally-led" business.
It plans to use around GBP25 million of the rights issue proceeds for store closures, GBP20 million for its store refurbishment programme, GBP10 million invested in digital systems and infrastructure, and GBP40 million to repay its existing term loan.
Mothercare shares were down 2.9% at 231.00 pence Thursday.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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