(Bloomberg) -- British online retailer Asos Plc unveiled a debt refinancing deal and raised £75 million ($93 million) in equity to support a turnaround plan.

The retailer’s largest shareholders, Danish fashion group Bestseller and US hedge fund Camelot Capital Partners, participated in the capital increase, Asos said Friday. Asos also obtained two new borrowing facilities that expire in April 2026, extending its debt deadline. 

The stock was unchanged at 9:40 a.m. in London after rising as much as 8.9%.

The company’s operating losses widened in its first half as Asos tried to cut inventory and excessive discounting. Chief Executive Officer Jose Antonio Ramos Calamonte is seeking to convince investors that his plan will return the business to profit.  

Asos was for many years a stock market darling amid rising sales and profits. Now the equity has fallen 86% in the past three years and the company is one of the most-shorted UK stocks as investors bet it has further to fall. 

Analysts at Shore Capital warned Friday that they don’t expect Asos to generate free cash flow in the near future. 

“It would not come as a surprise if there arises a need for an additional equity raise, potentially resulting in further dilution,” Eleonora Dani at Shore Capital wrote in a note to clients. She has a sell rating on the stock.

A separate offering of as much as £5 million in shares for retail investors remains open.

Asos obtained a new £200 million senior term loan and £75 million super senior revolving facility both with specialist lender Bantry Bay Capital, which is backed by US activist Elliott Investment Management. The borrowing replaces the existing £350 million credit facility with bank lenders that was due to expire in November 2024. 

The new facilities carry an average interest rate of about 11%, bringing the rate across its borrowings to about 5%. 

Analysts at Liberum called the refinancing “expensive” and said it brings “no additional liquidity or funding.” In a worst-case scenario Asos may require further financing to replace £500 million of convertible bonds that come due in 2026, the analysts wrote.

(Updates with debt financing from first paragraph, analyst quotes starting in fifth paragraph)

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