SMU Approves Capital Raise

Shareholders of Chilean retailer SMU have approved a capital increase that should bring in more than $500m, the retailer says. The plan is for CLP167.33bn ($335m) to come from controller Alvaro Saieh this year, and another CLP111.33bn at some point before October 2016. In total, SMU will sell 1.56bn shares at CLP178.9 each. The retailer is raising funds and selling assets to shore up finances, after it revealed in July reporting errors that showed it had breached debt covenants. SMU bondholders agreed in August to grant a waiver for the covenants, in exchange for a fee equivalent to 1.0% of the face value of their debt. SMU has also agreed to take out a subordinated credit for $300m before the end of the year and is working on the sale of $300m-$400m in non-core assets.