Embattled DX Group's turnaround plans have been backed by investors, who have approved the issuing of new shares amounting to £4.76m of fundraising for the firm.

The fundraising, which remains subject to shareholder approval, would fund the transformation and growth plans from the group's new leadership team.

DX said that if approved, it will put the money into growth initiatives including an expansion of its sales capabilities, building more depots and boosting its IT network.

In a trading statement today (4 May), the group announced it intended to release just under 49 million new shares to raise the money, which will also pay for the key element of the management team’s recovery plan, being the separation of its freight and express businesses.

The statement added that Gatemore Capital Management, which presently holds 23.8% of the business, will be looking to increase its shareholding to between 35.3% and 36.4%.

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Last month the new management team at DX said that its turnaround strategy was gathering pace.

CEO Lloyd Dunn, who stepped into the role last October and put £5m into the business in the form of a loan note, said: "We’re delighted to have received an overwhelmingly positive response from new and existing investors for our plans to raise £4.76m and to strengthen the Group’s balance sheet with the conversion of the Loan Note into equity.

“Both initiatives, if voted through by shareholders on 22 May, represent positive steps forward as we proceed with our plans to rejuvenate DX.”

Chairman Ron Series added: “We are pleased to announce these proposals to strengthen DX’s balance sheet and raise additional funds for the business.

"Once approved by shareholders, these initiatives will place the Company in a significantly improved position as we proceed with our turnaround plans."