Boohoo secures approval for a £39.3 million share issue, aiming to strengthen its financial foundation amidst ongoing corporate challenges.
- The company reported a pre-tax loss of £147.3 million for the six months ending August 2024, prompting the need for strategic financial restructuring.
- Approval from lenders marks a decisive step in Boohoo’s ongoing business review and turnaround plan.
- The fundraising initiative is set against the backdrop of a boardroom battle, with major shareholder Frasers Group pushing for leadership changes.
- Frasers Group’s critique cites poor results and supply chain issues as reasons for demanding new company directors.
Boohoo has successfully obtained lender consent to proceed with a significant fundraising initiative, targeting a £39.3 million share issue. This strategic move is designed to reinforce its financial standing and provide a strong platform to enhance shareholder value.
In recent financial disclosures, Boohoo highlighted a pre-tax loss of £147.3 million for the first half of 2024. This loss has catalyzed the company’s determination to implement a comprehensive business review aimed at financial recovery and growth.
Boohoo’s CEO, Dan Finley, expressed confidence in the completion of the fundraising efforts, emphasizing that it evidences decisive actions taken post-business review announcement. “This process will propel us forward in maximizing shareholder value,” he affirmed.
Chair Tim Morris also extended gratitude to the supporting banking syndicate, noting their essential role in providing a robust foundation for Boohoo’s recovery strategy. Their backing is seen as a fundamental element enabling Boohoo to unlock greater shareholder benefits.
This financial maneuver occurs during heightened tensions with Boohoo’s largest shareholder, Frasers Group. Holding a 28.1% stake, Frasers is calling for a shake-up in leadership, specifically advocating for the replacement of executive chairman Mahmud Kamani. Mike Ashley and restructuring expert Mike Lennon have been proposed as candidates for directorship at the upcoming shareholder meeting.
Frasers Group’s demands arise from what it describes as ‘dismal results’, a lack of transparency, and continued supply chain challenges within Boohoo. The group insists that the retailer’s operational problems must be addressed to cease ongoing dysfunctions.
Boohoo’s fundraising approval is a vital step toward stabilizing its finances amid internal and external pressures.
