The board of Venue Retail Group (VRG), a retailer of shoes, bags and accessories that operates in Sweden and Norway, has decided to proceed with a Swedish Krona 94.5 million (€8.9m-$10.4m) rights issue.

The Swedish company has received subscription commitments and guarantee commitments totaling approximately SEK 73.5 million (€6.9m-$8.1m). The rights issue is thus secured at approximately 77.8 percent, according to VRG.

Shareholders will receive one subscription right for each share held regardless of share class. Two subscription rights will give the option to subscribe for 11 new B shares. The subscription period will run from Oct. 27 to Nov. 10.

After deducting the costs of the transaction, net proceeds from the cash injection will be about SEK 88 million (€8.3m-$9.6m).

The proceeds will be used to supply the company with goods, restructure the physical store network, develop digital stores, and pay creditors as well as installments on loans and credits.

The rights issue still has to be approved by shareholders in an extraordinary general meeting.

VRG applied for insolvency proceedings and obtained it on Nov. 20, 2019. On Sept. 18, 2020, a Stockholm district court approved the company’s debt composition proposal, under which creditors will receive payment for the entire claim amount up to SEK 2,000 (€188.3m-$219.0m) and payment of 25 percent of excess amounts. The district court’s decision, which can be appealed within three weeks from Sept. 18, will result in the ending of VRG’s reorganization.

VRG also entered into a financing agreement with the bank Nordea. The financing is however conditional on the debt restructuring agreement becoming final and the company carrying out the rights issue with guaranteed commitments of at least SEK 73.5 million.

The company’s business is conducted through the wholly-owned retail chains Accent, Morris, Rizzo as well as with the NK department stores. Accent, in Sweden, and Morris, in Norway, offer a range of handbags and suitcases as well as gloves. Meanwhile, the shoes and accessories business is focused on Sweden and carried out under the Rizzo banner and through concepts stores at NK.