Mothercare has received approval from creditors for a rescue plan which could see it close as many as 49 stores.
Voting today on a company voluntary arrangement (CVA) proposal, creditors gave a green light to reduced rents equivalent to 35 per cent of the original price on 49 stores. This will be paid for 12 months while the company holds crunch talks on the sites.
A further 21 sites will be retained but on a half-price rent, while 64 will continue at the current rate.
Shares in the company were up as much as 10 per cent at 34.1p following the news.
Mothercare will now turn its attention to an offer of new shares, raising approximately £28m. This is expected to complete in July, and will be priced at around 19p per share.
“We are very grateful for the support of our many stakeholders across our creditor base in supporting today’s CVA proposals,” said Clive Whiley, interim executive chairman.
“Their forbearance and support today is a crucial step forward to achieve the renewed and stable financial structure for the business that will drive an acceleration of Mothercare’s transformation. These measures provide a solid platform from which to reposition the Group and begin to focus on growth, both in the UK and internationally.”
This comes just two weeks after former chief executive Mark Newton-Jones made a shocking return to the business, alongside the announcement of the turnaround plan.
