Koutons to raise over Rs 1,000 cr through preferential shares

Debt-ridden Koutons Retail India has announced its plans

to raise up to $200 million (around Rs 1,000 crores) by issuing preferential shares to promoters and others. In a filing to the BSE, the company said its board of directors "considered the preferential issue of equity shares to promoters and others...for a value up to $200 million." It said the issue could be through various routes such as preferential allotment, private placement, QIP, ADR, GDR, FCCB or by any other means. The board has also appointed Ashwini Kumar as Independent Director with effect from May 17, 2012.

The shares of Koutons Retail recently plunged 15 per cent to an all-time low after the National Stock Exchange (NSE) said it would suspend trading in the apparel retailer’s stock due to non-compliance with the listing agreement.

Koutons Retail had posted a net loss of Rs 38 crores on revenues of Rs 53 crores for quarter-ended September 2011. It has been in trouble for the last three years. Though the company went public in 2007 and took long-term debt to expand its store network to cash on the retail boom, the economic slowdown of 2008-09 hit sales and inventory piled up. The company faced difficulty in paying lenders and opted for corporate debt restructuring (CDR) in November 2011.

Saddled with Rs 600 crores debt at an average interest of 14 per cent, Koutons downsized operations from the peak of 1,400 stores to 900 stores in May 2011. It also closed 150 stores of its casual menswear brand, Charlie Outlaw, last year to cut costs and losses.