StockMarketWire.com - Struggling baby goods retailer Mothercare launched a £32.5m equity issue as part of its re-financing plan announced in May, while upping its store closure forecast to 60.

New shares in the company would be placed to existing shareholders at 19p a piece for each share already owned.

Mothercare said it would shortly publish a prospectus for the raising, and convene a general meeting to approve it.

The company also said that a company voluntary agreement, or CVA, proposal related to Childrens World had been rejected by creditors.

Consequently, Childrens World had been placed into administration, resulting in the transfer of 13 of its 22 stores to other Mothercare group companies to continue trading.

The completion of the group's other CVA proposals and the administration of Childrens World were expected to result in 60 UK store closures and a continuing UK store estate of 77 stores by June 2019 -- with 19 of those stores on reduced rent. The company had previously planned to close 50 stores.

Mothercare also provided a market update, stating that current trading 'continues to follow the patterns seen in the second half of the last financial year, with challenging conditions in the UK and some stability visible in our international operations'.

A cost savings initiative had now identified cuts of £19m, together with a £10m cash realisation arising from the restructure process.

'When I joined the business just three months ago, Mothercare faced a bleak future with growing and pressing financial stresses upon the business,' interim executive chairman Clive Whiley said.

'We have worked tirelessly as a team to get to where we are today and this fully underwritten equity issue marks the end of this initial phase, returning the group to financial stability.'

'This could not have happened without the support of all of our stakeholders for which we are very grateful.'

Whiley said the company has also been busy 'on numerous fronts' to restructure the group.

'Whilst the lack of full approval for the Childrens World CVA was disappointing, we have now found a solution which allows us to go further and faster with the right-sizing of our store portfolio.'

'We have also identified significant areas for further efficiencies and cost savings, which will underpin our return to a sustainable future.' Story provided by StockMarketWire.com