New Look and Iceland supermarket investor Brait said it plans to sell off assets over the next five years in a bid to shore up its finances.
The South African investment firm, which is also the majority owner of gym brand Virgin Active, also saw its shares plunge as it announced a major rights issue.
Brait said it plans to adopt a new strategy which will focus on returning capital to shareholders over the next five years through asset sales.
It said that the “recapitalisation of assets” will reduce and extend the maturities of its debt, providing the opportunity to focus on growth elsewhere in its portfolio.
The company also plans to launch an equity capital fundraiser for up to 5.6 billion Rand (£300 million) as it seeks to pay debts ahead of fast-approaching deadlines.
The restructuring proposals include a specific 350 million Rand (£18.4 million) issue to private equity firm Ethos, ahead of a deadline for Brait to pay off a bond worth the same figure which matures in September 2020.
Jabu Moleketi, chairman of Brait, said: “The deal represents a positive step forward and a holistic solution for Brait following extensive discussions to materially reduce the debt on its balance sheet.
“We have a portfolio of distinctive, financially strong and cash generative investments and have today outlined a way forward that involves a strategic change of direction.”
The firm made the announcement as it revealed that its loss narrowed to $90 million (£70 million) for the six months to September, from $216 million dollars in the same period last year.
Brait said Iceland turnover has risen by 2.4% over the 24 weeks to September 13, driven by the opening of 29 stores across the UK.
Meanwhile, revenues at Virgin Active increased by 3% to £451 million for the nine months to 30 September.
New Look recently revealed it had slashed a £41.9 million loss in the first half of the 2019 financial year to £11.2 million in the most recent six-month period, ending September.