Asda has borrowed another £155m through a private loan to pay off looming debts.

The embattled supermarket said its lenders had agreed to a £155m top-up of funds on an existing loan, which is due for repayment 2031, to help pay off more pressing debts due over the next 24 months.

Along with £155m of cash from its balance sheet, Asda will use the proceeds of the loan to pay off £310m of debt maturing in 2025 and 2026.

It is understood this decision has reduced financial pressure on the supermarket giant and is expected to give Asda more flexibility.

The move to secure some breathing space comes just days after Asda came under scrutiny over its soaring debt levels. 

Its debt pile currently sits at around £6bn,which meant it paid £441m in finance costs last year alone, though it refinanced £3.2bn of its borrowings in May, which helped delay its repayments until the next decade.

Speaking to The Telegraph earlier this week, a spokesperson from the grocer said: “Asda is a highly cash-generative business with a strong and stable capital structure, enabling us to invest in our colleagues and new customer propositions while simultaneously reducing leverage, which has decreased from x4.1 to x3.0 over the last 18 months.

“Asda’s net debt at the end of Q3 2024 was £3.8bn – a £100m reduction on the previous quarter – and the business is committed to deleveraging.”

Last month the retailer named former CEO Allan Leighton as its executive chairman, succeeding Lord Stuart Rose, in a bid to turnaround its poor financial performance.

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