Findel returns to its shareholders with call for £80m cash

THE loss-making home shopping firm Findel is considering plans to raise £80 million in its second cash call to shareholders in as many years.

The group, which owns Express Gifts and sells football shirts for Everton football club through its Kitbag business, hopes to use the money to pay down some of its 336.8m debt and to fund a recovery plan.

It raised 81m through a rights issue in August last year but is looking at plans to launch more shares on the market as part of a proposed five year refinancing deal agreed with its banks.

The plans have not been finalised but negotiations with lenders are in advanced stages. Schroders and Toscafund, chaired by former Royal Bank of Scotland chairman Sir George Mathewson, control more than 50 per cent of the stock, and both have backed the deal.

Findel yesterday revealed it reduced its pre-tax losses by 32 per cent to 15.5m in the half-year to 1 October, on sales down 3.5 per cent at 264m. The company was forced to restate its results after it discovered fraud in its education supplies business.

It appointed Roger Siddle as chief executive in July after he was drafted in as a consultant and found that previous problems were caused by underinvestment. Under the new strategy, its mail order shopping company, Express Gifts, will receive a 7m investment in new computer systems, better credit checks to weed out customers likely to default on payments.

Online sports retailer Kitbag, which manages kit sales for Everton FC, aims to expand by building relationships with other clubs. It has relationships with Manchester City and Nottingham Forest. Health and beauty marketing business Kleeneze is to expand into parts of the UK.

Its educational supplies division hopes to reverse recent declines in market share by improving its supply chain and offering better prices to schools. Shares in Findel were following the announcement.