MISSISSAUGA, Ont. – The Second Cup Ltd. (TSX:SCU) is increasing the size of a previously announced equity offering to at least $7 million, up from $5 million, as a result of positive investor response.
The offering could generate as much as $8.1 million before expenses if GMP Securities exercises its agents option to acquire an additional 15 per cent of shares of the shares offered, before the closing.
Second Cup will use proceeds to fund growth and the renovate company-owned cafes in priority locations.
The equity offering is part of a three-year recovery plan for the specialty coffee company, which announced last week that it had a $26.3-million loss in the third quarter — mostly due to reduced value of its brands and trademarks.
Second Cup has been faced with increased competition in recent years from high-end coffee retailers such as Seattle-based Starbucks and major restaurant chains such as Tim Hortons (TSX:THI) and McDonald’s.
The Mississauga-based franchise company has been working for months to recover its position in the Canadian market, hiring Alix Box _ who has held senior positions at Holt Renfrew and Starbucks _ as its chief executive in February.