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Carpetright has formally announced the fundraising as part of its restructuring plan to rescue the business.

In a statement, Carpetright has said: "The Board of Carpetright is pleased to announce a fully underwritten proposed share issue to raise net proceeds of approximately £60.0 million (£65.1 million gross) through the issue of 232,463,221 New Ordinary Shares by way of a Placing and Open Offer at a price of 28 pence per New Ordinary Share."

The Issue Price represents a discount of 15.8 per cent. to the Closing Price of 33.25 pence per Ordinary Share on 17 May 2018.

Carpetright will shortly send Shareholders a Prospectus in connection with the Placing and Open Offer. The Prospectus will contain a notice of a general meeting, to be held at 4 p.m. on 6 June 2018, to approve certain Resolutions necessary to implement the proposed Placing and Open Offer.

CEO of Carpetright, Wilf Walsh said: "We are delighted to have received such strong support from our shareholders and other investors in achieving this fully underwritten fundraise. The £60m proceeds from the Placing and Open Offer will give us the resources we need to complete our restructuring and accelerate our recovery plan.  As well as funding implementation of the CVA to create a right-sized estate of stores on sustainable rents, it will provide the necessary capital to refurbish and modernise the ongoing store estate and to upgrade our digital platform - both vital investments in our future.  We believe that a recapitalised market leader will ultimately be better for customers, suppliers, landlords and shareholders."

Financial Times reported that the proceeds from the rights issue will also allow Carpetright to repay a £12.5m short-term loan from Meditor, a major shareholder. Last week, Carpetright borrowed a further £17.25m — including an arrangement fee — from Meditor, a private investment group run by former fund manager Talal Shakerchi, at 18 per cent annual interest compounding monthly until July 2020.

Carpetright recently announced plans for a company voluntary agreement (CVA) and is set to close underperforming stores with long leases.

Mr Walsh said: "While the board is confident that its brand investment and store refurbishment strategies have been, and will continue to be, successful in enabling Carpetright to respond to increased competition, it believes addit

ional measures are necessary to directly address this legacy property issue.

"The board is therefore exploring the feasibility of a CVA in order to expedite the rationalisation of its property portfolio, with the clear objective of establishing a right-sized estate of contemporary stores, on economic rents, complemented with a compelling online offer."