New Look has agreed a debt-for-equity swap with a group of its key financial stakeholders, which is aimed at reducing its long-term debt by 80% from £1.35bn to £350m.
It will also raise £150m in capital through the issuance of new money bonds.
New Look said its total UK like-for-like sales improved from -4.2% in the first quarter to -2.3% in the second quarter of its financial year.
However, a decline in footfall over the Christmas trading period led to a 5.7% decline in UK like-for-like sales in December.
This was further hit by the loss of stores due to the company’s company voluntary arrangement (CVA) this year.
EBITDA for its full-year 2018/19 is projected at £84m from the core business, however a £27m loss is predicted from the non-core business.
The debt-for-equity transaction is expected to complete during the first quarter of its full year 2019/20, between April and June 2019.