Troubled Mothercare confirms rumours

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Troubled Mothercare confirms rumours
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Mothercare (LON:MTC) has responded to recent media speculation by announcing that it is finalising a restructuring and refinancing package. The details of the schemes will be announced later this week along with the company’s final results for the last year. The firm said that steps to be taken will include a new underwritten equity issue and access to new committed debt facilities, but commentators are concerned that they may also include a company voluntary arrangement.

Rumours circulated over the weekend that the company will report a 95% drop in profits this Thursday, which would be conceivable after the profit warning issued in January and the news in March that it was negotiating terms with its lenders. The company also replaced its Chairman and CEO in the last two months. If it were to enter a CVA, it would be easier to close stores, cut rents, and reduce staffing levels.

Shares in Mothercare had fall by 6.11% to 18.75p at 11:05 BST.

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