(Alliance News) - Shares dropped in McColl's Retail Group PLC on Monday after confirming media reports that it was considering options relating a potential capital raise to increase the number of its Morrisons Daily store conversions, and bolster its balance sheet.
Shares in the Brentwood, Essex-based convenience store chain were 15% lower at 29.60 pence on Monday in London.
On Sunday, Sky News reported that McColl's was planning to raise around GBP30 million in cash through a placing, in order to pay off some of its debt and accelerate the pace of its store conversion programme, as part of a deal with Wm Morrison Supermarkets PLC.
https://news.sky.com/story/morrisons-partner-mccolls-in-talks-with-investors-about-30m-cash-call-12376421
Over the next three years, 300 McColl's convenience stores are to be converted to the Morrisons Daily format. The stores will offer a full Morrisons convenience range and will be branded Morrisons Daily, but will continue to be owned and operated by McColl's.
In March, Morrisons and McColl's had extended their partnership by a further three years, with Morrisons now to act as McColl's sole wholesale supplier for its estate of over 1,200 stores out to 2027.
McColl's stressed that no final decision has been made on whether to proceed with a fundraise, or on its size and timing.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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