Shares of McColl’s Retail Group fell about 26% on Thursday after it announced it intends to raise up to £35 million via a discounted placing of shares.

McColl’s said it wants to sell 150 million new shares via a placing at 20p per share, and 25 million shares via an open offer at the same price.

The company’s shares had been trading at 29p on Wednesday.

McColls also announced results showing its pretax loss in the six months to May 30 widened to £5.9 million from £1.3 million and revenue was 5.3% lower year-on-year at £572.7 million.

McColl’s CEO Jonathan Miller said: “Today’s capital raising represents a transformational opportunity to accelerate our strategy and capitalise on the growth opportunity available to us in food-led convenience.

“We are delighted with the progress we have made so far with the roll-out of Morrisons Daily conversions within our store estate.

“We have a supermarket-quality offer and now also a proven blueprint that offers a strong return on investment, delivering double-digit sales uplifts and fast payback.

“The proceeds of the capital raising will enable us to build on this foundation by accelerating the pace of the roll-out of our Morrisons Daily conversions to deliver 50 additional conversions on top of the original 300 planned, and to complete the roll-out a year earlier than current plans.

“The capital raising will also enable us to further improve the grocery infrastructure of these sites to enhance profit potential, as well as further invest in our wider estate and reduce leverage.

“Morrisons’ core grocery proposition, with its brand, quality and product range, is perfectly complemented by McColl’s’ neighbourhood store locations, strengths in core impulse sales categories, and expertise in running services such as Post Offices.”