Mothercare creditors okay CVA plan, fundraising on track

Mothercare creditors have approved the retailer's proposals for a company voluntary arrangement that will enable it to shut 50 of its 137 shops and force through rent reductions on 21 others.

Mothercare also plans to raise £28m from issuing new shares, and said the offer was expected to complete in July and be priced at 19p per share, though the final price could change depending on the market.

An agreed extension of its existing debt to £67.5m and £18m in shareholder and trade partner loans from existing lenders is conditional upon the share issue.

"We are very grateful for the support of our many stakeholders across our creditor base in supporting today's CVA proposals," said interim executive chairman Clive While, who surprisingly brought back Mark Newton-Jones a month after sacking him as chief executive.

"Their forbearance and support today is a crucial step forward to achieve the renewed and stable financial structure for the business that will drive an acceleration of Mothercare's transformation. These measures provide a solid platform from which to reposition the group and begin to focus on growth, both in the UK and internationally."