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Money to go towards store refit programme and easing cash flow problems

DSGi confirms ?311m rights issue

DSGi has confirmed to the Financial Times that a £311m rights issue is imminent, with the retailer saying the funds raised from it will go towards its store refit programme and alleviating cash flow problems being caused by credit insurers.

It said that the move had been forced by its net debt rising quicker than it had anticipated, blaming it on credit insurers withdrawing backing for its purchases.

Shares rose by 13 per cent on the news of the rights issue.

The retailer also revealed that sales had fallen three per cent during the 26 weeks to April 18th, while like for like sales were down 11 per cent for the same period. However, despite those figures, the retailer stated that pre-tax profits would be no lower than £42m for the year, which ends on May 2nd.

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