WeSC AB, a Swedish street-wear clothing company, declined the most ever in Stockholm trading after announcing its second sale of new shares in less than a year, citing the need to strengthen the financial position.
WeSC declined as much as 34 percent to 5.25 kronor, the biggest drop and lowest price since the stock was listed on Nasdaq OMX Stockholm exchange on May 19, 2008. The shares slid 33 percent to 5.4 kronor as of 11:50 a.m. local time, with volumes at six times the daily average in the past three months. The shares have slumped 64 percent so far this year.
The company plans to raise about 55 million kronor ($8.5 million) in a fully-guaranteed sale of stock to current shareholders, WeSC said in a statement today. Holders of two shares may subscribe for three new ones at a price of 4 kronor per share. The company raised 21.4 million kronor before costs in a rights offer announced in November last year, made to strengthen finances due to late payments from Europe.
“WeSC has since the autumn of 2011 had a period of declining sales in important segments and markets, related mainly to payment difficulties of European clients,” the company said in today’s statement. “The added funds from the issue will meet the company’s need for capital.”
WeSC also said that its current Chief Executive Officer Greger Hagelin will step down and focus on branding and marketing in the unit We International while Johan Heijbel will take over as acting CEO of the group.