Unbound Group PLC (AIM:UBG) fell 20% to a new all-time low of 2.6p after the owner of the Hotter Shoes chain said it was launching a strategic review and simultaneously putting itself up for sale.
Earlier this month, Marwyn Investment Management pulled out of a potential funding deal as the retailer warned of tough trading and said it might need its banks to continue waiving its banking covenants.
It still expects these waivers will be needed, and said if trading continues to be weak a “temporary working capital shortfall could arise” in after the summer as it stocks up on autumn and winter inventory, amid ongoing debt service requirements that include £1mln repayments due at the end of this July and next January.
The board expect the shortfall “could be addressed via working capital management and other measures that are ready to be implemented if required, [but] also believes that such measures could damage the longer term growth prospects of the group”.
Efforts to raise funding or refinancing its debt facilities are ongoing after Marwyn pulled out, but the launch of a formal strategic review and a sale process are for the board to “consider the options available to maximise value for the company's shareholders and the group's other stakeholders”, including a potential full sale of the company, raising additional funding from debt specialists or strategic investors, or selling off Hotter Shoes.