🚀 Successful Fundraising
Boohoo Group, a UK-based fashion retailer, has successfully secured gross proceeds of around £33.3 million ($40.6M) through a Placing and Subscription process. Launched on November 13, 2024, the process closed just one day later. The issue price was set at 31 pence per share, a 3.3% higher than its previous closing price of 30 pence. In total, over 107.6 million new ordinary shares were offered during this oversubscribed event.
📈 Retail Offer Insights
Boohoo is also expecting an additional £6 million ($7.3M) from a retail offer, which is currently open to eligible UK investors. This offer consists of 19.4 million shares and is set to close on November 15, providing smaller shareholders the chance to take part. CEO Dan Finley expressed enthusiasm for the significant support from existing shareholders as the company moves to its next growth phase.
🤝 Strategic Moves by Shareholders
Frasers Group, which owns 27% of Boohoo, played a significant role in this process. They subscribed for 39.1 million new shares, although part of this is subject to clawback provisions. Co-founder Mahmud Kamani also subscribed for 49.9 million new shares. This funding aims to tackle ongoing leadership pressures and help reshape Boohoo’s management for future challenges.
💡 Plans for Growth
Boohoo plans to use the raised funds primarily to reduce the company’s borrowings and strengthen its balance sheet. This comes at a time when the company reported a 15% revenue decline over the last six months due to tough market conditions. The growing trend of marketplace sales with a commission-only model poses challenges for Boohoo's traditional revenue streams.
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