THG PLC on Monday announced a refinancing and fund raising which it said would position it to deliver on the next phase of development following the demerger of Ingenuity.
Manchester, England-based THG, formerly known as The Hut Group, is an online retailer of beauty and nutrition products. At the start of January, it completed the demerger of its Ingenuity business, which offers the THG e-commerce platform to other retailers.
THG said it has agreed a partial amend & extend of the existing EUR term Loan B to extend the maturity of €475 million to December 2029.
In addition, it has agreed the repayment of the £109 million existing GBP term loan A and the remaining €125 million of the TLB through a combination of cash on balance sheet and a new equity contribution of at least £60 million and up to a maximum of £91.2 million.
Further, it has extended the maturity of the existing £150 million revolving credit facility to May 2029.
‘This represents another significant step in THG’s simplified debt and equity investment case as a cash generative global retailer and brand owner, well positioned to deliver on its next phase of development in its growing consumer markets,’ the company said in a statement.
As a result of the refinancing, net total leverage, excluding leases, will decrease from 3.2x to 2.6x based on continuing adjusted earnings before interest, tax, depreciation and amortisation, excluding Ingenuity, of £92 million in 2024, on a fundamentally more cash generative business.
THG said under current authorisations, it can issue up to £31.2 million worth shares.
Thus the equity contribution will comprise a £31.2 million proposed accelerated bookbuild placing at Monday’s closing share price of 34.00 pence.
The placing will be made available to eligible shareholders and other long-term supporters of THG.
THG’s founder and chief executive, Matthew Moulding, has agreed to subscribe for up to £31.2 million depending on the success of the placing.
Moulding will also inject up to £54.6 million via a non-interest bearing convertible loan. This may be scaled back based on demand from institutional investors in the placing.
In addition, THG will raise £5.4 million by Moulding paying up partly paid shares.
If the equity contribution exceeds £60 million, the incremental proceeds will be used for general corporate purposes.
THG said its remaining business delivered a robust 2024 financial performance, with continuing revenue of £1.7 billion, and expects to report continuing adjusted Ebitda of £92 million and free cash flow of £44 million. Including Ingenuity, continuing adjusted Ebitda is expected to be £123 million for 2024, in line with analyst consensus estimates.
THG will issue 2024 results and a first quarter trading update on or around April 30.
Shares in THG closed down 7.3% at 34.00 pence each in London on Monday.
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