(Alliance News) - Laura Ashley Holdings PLC on Wednesday said discussions between itself, lender Wells Fargo and major shareholder MUI Asia Ltd have resulted in the company securing approval to use loan to meet immediate funding requirements.
The stock was trading 45% higher at 2.40 pence each on Wednesday afternoon in London.
The unscheduled update was in response to press reports "regarding its financial position". The Times reported on Sunday that its Malaysian owners were trying to save the high street chain with an emergency cash injection.
https://www.thetimes.co.uk/article/malaysia-s-mui-group-owned-by-khoo-kay-peng-in-race-to-save-laura-ashley-svlc95d8k
On Wednesday, Laura Ashley said that further to discussions, it has secured approval to utilise requisite funds from its working capital facility with Wells Fargo to meet its immediate funding requirements. It re-affirmed that this does not constitute a cash injection by MUI Asia into the company.
The clothing & homewares retailer's shares fell 34% on Monday after it said that it was in discussions with Wells Fargo and MUI Asia to figure out an arrangement that will allow the company to draw down additional amounts to meet its working capital needs in the short to medium term.
Laura Ashley revealed that trading in its current financial year ending June 30 has been challenging. For the 26 weeks to the end of December, total group sales were GBP109.6 million, down 11% from GBP122.9 million for the same period a year prior.
The decline was attributed to market headwinds and weaker consumer spending. The company said recent movement in store stock and customer deposit levels resulted in a reduction to the amount it could withdraw from its bank facility with lender Wells Fargo and it was therefore in financing discussions.
By Ife Taiwo; ifetaiwo@alliancenews.com
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