UPDATE 4-DSG in $460 mln cash call to speed up revamp

* To raise 211 mln stg in rights issue, 100 mln in placing

* Renegotiates 400 mln stg credit facility

* To revamp extra 100 stores over next 18 months

* Underlying profit will not be less than 42 mln stg

* Shares jump 18 pct to 6-mth high

(Adds detail, CEO comments)

By James Davey and Mark Potter

LONDON, April 30 (Reuters) - DSG International DSGI.L, Europe's second-biggest electrical goods retailer, announced a fully underwritten 311 million pound ($459 million)cash call to accelerate its store revamp plan and strengthen its finances.

The British firm, whose shares plunged by up to 90 percent last year on weakening trade and concerns about its finances, said it would raise 210.6 million pounds in a deeply discounted rights issue and 100 million pounds in a share placing. It also said it had renegotiated a 400 million pound credit facility.

"(This) removes quite a lot of the doubt about the survival of DSG. Our belief is that the share price had been artificially depressed by that," Chief Executive John Browett told reporters.

DSG follows a string of UK companies in seeking extra money from shareholders in 2009, but is only the second major retailer, after car dealer Inchcape Plc (INCH.L), to tap the market for funds. [ID:nLJ274049]

Throughout Europe, $22.1 billion was raised in equity deals in the first quarter of 2009, down from $129 billion in the same quarter last year.

DSG, which runs Currys and PC World stores in Britain, also said group debt at March 7 was 502 million pounds, higher than some analysts had expected, and like-for-like sales in the second half of its financial year dropped 11 percent.

Nick Bubb, analyst at Pali International, said investors were looking beyond this, relieved at the survival of DSG and encouraged by signs of an uptick in consumer confidence.

A GfK/NOP survey on Thursday showed UK consumer confidence in April rose to its highest level in a year. [ID:nLT882234]

However, Bubb said the figures from DSG and kitchens supplier Galiform GFRM.L, as well as a gloomy update from Home Retail (HOME.L) on Wednesday, showed shoppers were still reluctant to spend on discretionary items. [ID:nLT873416]

At 0922 GMT, DSG shares were up 18 percent at a six-month high of 44.25 pence, valuing the firm at 722 million pounds.

DENIES U-TURN

DSG, whose chains also include UniEuro in Italy and Elkjop in the Nordic countries, announced in March that trials of its new format stores had been successful and it would extend the programme. [ID:nL3120299]

At this point Browett had said DSG could fund its renewal and transformation plan without the need to raise extra cash.

On Thursday he denied the cash call amounted to a U-turn.

"When I made that statement in March the exact words I used were 'in theory we could get through.' However, our view was that we were taking unnecessary risk with the balance sheet and therefore, given the strength of the results out of the new stores, that we would be able to actually raise some equity."

He said the extra money would allow it to revamp 100 more stores than originally planned over the next 18 months.

"By Oct. 2010 in the UK we want to have about 80 percent of our gross profit coming through the new stores," he said.

DSG said the five-for-seven rights issue of 1.5 billion new shares would be priced at 14 pence apiece, a 63 percent discount to Wednesday's closing price.

It will also place 333.3 million new shares at 30 pence, a 20 percent discount to Wednesday's closing price.

Both the placing and rights issues are fully underwritten by Citigroup (C.N) and JP Morgan (JPM.N).

Browett said although the UK trading environment remained tough "it looks like it's following the pattern of a normal recession and nothing worse".

He said demand in some areas, such as computing, remained "surprisingly strong".

DSG said profit before tax and one-off items for the year ending May 2 would be no less than 42 million pounds.

This compares with the median forecast of 44 million in a Reuters Estimates poll of 14 analysts and is down from 205 million the year before. ($1 = 0.6772 pound) (Additional reporting by Douwe Miedema; editing by Karen Foster and Simon Jessop)