Boohoo raises 33.3 million pounds via placing and subscriptions

On the heels of publishing its interim six month report, Boohoo has reported that it has successfully secured gross proceeds of around 33.3 million pounds in an oversubscribed Placing and Subscriptions process.

Launched November 13 and closed today, the Placing and Subscriptions were offered at an issue price of 31 pence per share, a 3.3 percent premium over its closing price of 30 pence on Wednesday, at an aggregate of over 107.6 million new ordinary shares.

An additional six million pounds is to be made from 19.4 million shares via a retail offer, which is set to close November 15, and is currently open to eligible investors in the UK.

Frasers Group, which holds a 27 percent stake in Boohoo and has been putting pressure on the firm to change leadership, subscribed for 39.1 million new shares, part of which is subject to clawback.

This is also the case for director and Boohoo co-founder Mahmud Kamani, who subscribed for 49.9 million new ordinary shares.

In a regulatory filing, Dan Finley, Boohoo Group’s chief executive officer, said: "We are pleased with the level of support from our existing shareholders for the business in its next stage of growth.

“We trust that the Retail Offer provides smaller shareholders the opportunity to participate also."

Boohoo said that it plans to use the proceeds to reduce the group’s borrowings and strengthen its balance sheet.

The company reported a revenue decline of 15 percent for the six month period, reflecting difficult market conditions and the continued growth of the marketplace with its commission-only revenue model.