UK frozen-food retailer Iceland Group is mulling a sale-and-lease-back deal on 750 outlets in its national property portfolio in a bid to raise more cash.

The proposal, which could unlock between £300m (US$426.64m) and £400m from its balance sheet, is just one of the cash-strapped chain's options included in its financial strategy review.

The money will go towards the company's three-year expansion plan to open 80 new outlets, and serve to allay the fears of institutional investors that they risk being called upon to provide £200m of new equity through a deeply discounted rights issue.

Fears of a rights issue have lingered since the beginning of last year, when the chain hit troubled sales waters and saw its stock price fall. Earlier this month, however, Iceland denied reports that it had not found support for such an issue to raise cash.

Iceland has appointed accountant Ernst & Young to examine the fund-raising options on its property portfolio.

CEO Bill Grimsey insisted yesterday however that,  "the details about the refinancing of Iceland will not be discussed until the end of February."