Shareholders in Coffee Republic today voted in favour of the coffee chain's plan to raise £800,000 to pay off debt and provide working capital.
The company, which now has 200 units, has seen rapid site growth since it switched to a franchising model at the expense of turnover, which slid 39.8% to £5.8m in the year to 30 March 2008.
Following a "debt compromise arrangement" with Barclays and the creation of 2,666,667 new shares, the company will be debt free now that shareholders have given the nod to the move at an Extraordinary General Meeting.
James Muirhead, Coffee Republic's finance director and a participant in the placing, said: "The debt compromise with Barclays offers the company a significant opportunity to eliminate its debt position on commercially attractive terms."
Coffee Republic chairman Peter Breach and vice-chairman Steven Bartlett will also purchase additional shares as part of the move.
By Chris Druce
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