Outdoor retail company KMD Brands is raising funds to help recapitalise the business as it reports a first half loss of $13.1 million.
The NZX and ASX-listed owner of Kathmandu, Rip Curl and Oboz footwear brands saw group sales grow 7.3 percent to just over $505m in the six months ended January.
However, gross margins fell while operating expenses were up 2.4 percent to $223.8m.
"We're particularly encouraged by the improved performance of Kathmandu, which has delivered double-digit same store sales growth for the first time in over two years," chief executive Brent Scrimshaw said.
In need of more capital to continue its brand turnaround strategy, the company launched a $65.3m equity raising, underwritten by Goldman Sachs and Forsyth Barr.
The new shares are being sold at six cents each, a 69.2 percent discount to KMD Brands' last traded price of 19.5 cents a share. Institutional shareholders are being offered shareholder $6.8m worth of shares, with existing shareholders being offered the balance of $58.5m.
The capital raising is part of the deal the company has made to refinance debt, securing a $205m multi-year facility. KMD Brands had a net debt position of $94m at the end of the first half.
"The refinanced facility provides KMD with a stable, long-term capital structure that, in combination with the proceeds from the equity raising, is expected to provide sufficient liquidity to execute on the Next Level transformation and fund working capital requirements," the company said in its market statement.
KMD Brands remained in a voluntary trading suspension after it delayed its results announcement last week and hinted at plans for the capital raising.
Chairman steps down
KMD Brands chairman and long-time board member David Kirk has announced he will step down in the coming months.
It was not clear from the company's statement whether he will remain on the board.
"With the balance sheet now strengthened through the debt refinancing and the launch of the equity raise, KMD Brands is well positioned to continue executing its Next Level strategy," he says.
"Having worked closely with the board and management through this critical phase, and been on the board for 13 years, I believe this is the right time to signal my intention to step down as chairman in the coming months."
The board said it has begun the process of finding a successor.
SHARE ME