AO World, a British online electricals retailer, plans to raise around 40 million pounds ($47.7 million) in new capital to bolster its balance sheet and increase liquidity, just days after its stock fell on cash crisis fears.
The announcement came only two days after the business announced that in May, a third-party credit insurer that serves some of its suppliers "rebased" its coverage to reflect post-COVID sales levels.
Following a Sunday Times story that the company was experiencing liquidity issues after credit insurer Atradius cancelled coverage, shares in the electricals provider plummeted about a third of their value in two trading sessions this week. AO World's stock has dropped by more than 57 per cent so far this year.
AO World said that it would issue new ordinary shares for 43 pence each, indicating an 8.5 per cent discount to the prior level of the stock.
"The net proceeds of the capital raise will strengthen the balance sheet and increase liquidity back to historic levels (relative to revenue base), and provide the flexibility to capitalise on market opportunities," AO World said in a statement on Wednesday.
The company located in Bolton, UK, said last month that it will close its failing operation in Germany because its prospects were deteriorating.
(Source:www.nasdaq.com)
The announcement came only two days after the business announced that in May, a third-party credit insurer that serves some of its suppliers "rebased" its coverage to reflect post-COVID sales levels.
Following a Sunday Times story that the company was experiencing liquidity issues after credit insurer Atradius cancelled coverage, shares in the electricals provider plummeted about a third of their value in two trading sessions this week. AO World's stock has dropped by more than 57 per cent so far this year.
AO World said that it would issue new ordinary shares for 43 pence each, indicating an 8.5 per cent discount to the prior level of the stock.
"The net proceeds of the capital raise will strengthen the balance sheet and increase liquidity back to historic levels (relative to revenue base), and provide the flexibility to capitalise on market opportunities," AO World said in a statement on Wednesday.
The company located in Bolton, UK, said last month that it will close its failing operation in Germany because its prospects were deteriorating.
(Source:www.nasdaq.com)
