Monday, January 24, 2022

Ocado to raise £35.8m and extend debt facility

Online grocer Ocado has announced today that it is to raise £35.8 million in placing as well as extend its debt facility as it seeks to allay fears around the possible breaching of banking covenants.

As of October 28th 2012, the retailer had net debt of £93.4 million, a cash balance of £56 million and drawings on its existing capital expenditure facility of £85.3 million.

Extending its banking facility of £100 million for a further 18 months to July 6th 2015, the extension was agreed by lenders Barclays, HSBC and Lloyds and seeks to fund expansion despite growing competition in the market.

Ocado is to sell 55.8 million new shares which will be issued by existing shareholders, representing 9.99 per cent of the retailer‘s issued share capital and news of the placing reportedly saw its shares surge by more than 20 per cent this morning.

Commenting on the deal, Duncan Tatton-Brown, Chief Financial Officer, said:”We have undertaken this Placing and early extension of our existing facilities to ensure that Ocado has the continuing resources to focus on delivering growth through increasing the range and enhancing our customers‘ shopping experience.”

As the company announced the plans to boost its balance sheet, it revealed that gross sales jumped 13.7 per cent year-on-year in the six weeks to November 11th 2012 as weekly orders reached 140,000 per week for the first time.

Ocado CEO Tim Steiner, who earlier this year announced a price war against rivals in a bid to claw back market share, said that the move promoted confidence in the embattled company.

“We are delighted that Ocado has achieved such strong endorsement from both its institutional and other shareholders and its lenders who support our confidence in our business model and growth prospects,” he said.


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