Online retailer THG has announced a debt refinancing and equity fundraise plan, with CEO and founder Matt Moulding investing £60m of his own money.
The package will reduce its £620m of debt and extend the term to 2029.
The group is looking to raise between £60m and £91.2m via an equity raise and a convertible loan. Moulding is committed to funding £60m of it, adding to the £50m he has already invested since its IPO in 2020.
Moulding wrote on LinkedIn yesterday he had waived all remuneration and expenses since the IPO, meaning he is “effectively paying to go to work each day”.
The remaining £30m was raised through the placing of new shares, which the company said was oversubscribed.
It follows the recent demerger of THG Ingenuity, which raised £95m for the company.
Wayne Brown, an analyst at Panmure Liberum, said that while the latest fundraise would be highly dilutive for non-participating shareholders, with up to 21% more shares entering the market, it could save the business up to £15m in interest costs.
The company’s share price was up almost 3% this morning following the announcement.
But Brown raised questions over the company’s future. “The group’s recent struggles have made us question if it has sustainable competitive advantages in tough nutrition and beauty retail categories where we would like to see further evidence of improved momentum.”
THG’s revenues at its two remaining divisions fell 2.5% to £1.7bn last year. This was led by a 8.7% fall in its nutrition business as the division underwent a rebrand for Myprotein.
On LinkedIn this week, Moulding reflected on the “crushing burden of responsibility when setting up a business. It’s a lot like parenting.
“People say it’s magical, and from the outside it looks simple enough. But, in a blink, four kids had arrived before I realised I’d signed up to a lifetime of stress – each additional child exponentially increasing the worry.
“And so, like any parent, I’m once again stepping up for THG. This time investing a further £60m into THG, underpinning the planned refinancing.”
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