Thorn Group Pursue $38M Capital Raise
Radio Rentals owner, Thorn Group, is reportedly looking to raise $38.7 million from fund managers, helping to settle its long-running class action lawsuit.
According the Australian Financial Review, the deal was presented to fund managers on Monday, encompassing a fully underwritten 1:1 accelerated, non-renounceable entitlement offer at 24 cents.
Funds will reportedly also be used to restructure the Radio Rentals business, and increase group working capital.
It comes after Thorn Group ceased its ‘Rent Try $1 Buy’ lease class action with a $25 million settlement early this month.
The class action was launched in 2017, and follows claims of misleading and deceptive contract conduct for over 200,000 customers.
The final settlement was less than the initial $50 million sought.
According to Maurice Blackburn, some ‘Rent Try $1 Buy’ customers were forced to pay up to seven times the RRP for products.
The news comes after Thorn shelled out over $8 million to ASIC in January last year, for remediation and penalties relating to customer leases inked between January 2012 – May 2015.
Radio Rentals stores in South Australia are not owned and operated by the Thorn Group. South Australian run Thorn Group stores are named ‘Rentlo Reinvented.’
For the financial year ending March 31, Radio Rentals fared an operating loss of $2.2 million.
The Group has previously claimed it’s confident it will be able to pay off the recent settlement, despite prior debts and write-offs.