Carpetright PLC (LON:CPR) said it has received shareholder approval for a company voluntary arrangement (CVA) with creditors and expects to report a 2018 loss.
The CVA will allow the struggling flooring retailer to shut 92 of its worst-performing stores and reduce rents on 113 remaining sites.
READ: Carpetright becomes latest company to ask creditors for help as it unveils plans to close 92 stores
It is conditional on securing £15mln in funding and a successful equity capital raise to cut debts and support the group’s restructuring plan.
Carpetright is aiming to raise £60mln through the equity raise, which the company expects to launch on May 18.
"The CVA Proposal will enable us to take the tough but necessary actions needed to restore our profitability,” said chief executive Wilf Walsh.
“Having now received approval from both shareholders and creditors we will press ahead with our plans for the proposed equity financing to recapitalise the business and enable Carpetright to address the competitive threat from a position of strength."
READ: CVAs explained: What is a company voluntary arrangement?
Carpetright issues profit warning
Carpetright also warned that it predicts a pre-tax loss of £7mln to £9mln in 2018 amid weak consumer confidence in the UK.
Full year like-for-like sales in the UK fell 3.6% after a 10.5% decline in the fourth quarter, the company said.
In the rest of Europe, like-for-like sales rose 1.1% for the year despite an 8.3% drop in the final quarter.
The UK high street has struggled as consumers cut back on spending due to higher inflation and stagnant wage growth. A shift towards online shopping has also weighed on bricks and mortar retailers.
A tough retail market has led to Toys R Us UK, Maplins and Conviviality entering administration this year while New Look is also shutting stores.
Shares in Carpetright fell 1.5% to 42p around midday.