McColl’s shares tumble after plans to raise £30m

McColl’s has seen a sharp fall in share price after confirming that it was pondering a multi-million capital raise.

The chain, which owns around 1200 convenience stores across the UK, is planning a cash call to deepen its partnership with Morrisons.

The Big 4 grocer supplies McColl’s shops with wholesale food and groceries, while McColl’s is converting 300 outlets into Morrisons Daily stores.

In March, the convenience store chain agreed to extend its Morrisons partnership by three years to 2027.

READ MORE: McColl’s ‘named and shamed’ for failing to pay minimum wage

“The agreement represents a significant milestone in McColl’s’ strategic goal of becoming a food-led convenience retailer,” it said.

According to Sky News, chief executive Jonathan Miller is preparing for a £30 million cash call, with around seven figures expected to be invested in McColl’s stocks.

McColl’s confirmed the capital raise would be used to speed up the Morrisons Daily store conversions.

A chunk of the proceeds will also reportedly be used to reduce some of its debt.

Shares fell 5.5p, or 15.7 per cent, to 29.5p.

The retailer made a £5.3 million pre-tax loss last year, despite a 3.2 per cent rise in sales to £1.3 billion.

It has told investors that its partnership will not be affected by the takeover battle for Morrisons.

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