Sydney-based women’s fashion wear group City Chic Collective (ASX:CCX) has requested a halt in trading of its shares until next Monday (June 24). This pause will allow the company to finalize the sale of assets from its Avenue business and secure new capital.
In a letter to the ASX, City Chic announced plans for a capital raising initiative. This will involve a fully underwritten institutional placement and a fully underwritten pro-rata accelerated non-renounceable entitlement offer of new fully paid ordinary shares in City Chic.
Details of the Avenue sale were not disclosed in the statement. The request for an extended trading halt suggests that achieving the capital raising goal might be challenging.
City Chic’s shares have experienced a 45% decline year-to-date, closing at 30 cents on Monday. The company currently holds a market value slightly over $68 million, with just $3.5 million in cash as of December 2021.
In 2019, City Chic acquired the online assets of Avenue from the administrators of the failed US retailer for approximately $24.4 million. Notably, Avenue’s performance in the December 2023 half-year did not receive mention in the company’s interim report earlier this year.