// AO confirmed that its credit insurance has been rebased, reflecting lower post-Covid sales
// The online retailer insisted that its liquidity is not impacted and that it has full access to its £80 million revolving credit facility
Online retailer AO has confirmed that its credit insurance has been “rebased” but has insisted that its liquidity is not impacted by the move.
It emerged over the weekend that Atradius had pulled cover for Ao’s suppliers, which had led to its share price plunging more than 15% this morning.
The retailer confirmed that its cover had been “rebased” in May, which it said reflected post-Covid sales levels.
It said: “This was a reduction from the heightened levels that had been in place and required through the period of the pandemic. To date this rebased cover has had no effect on AO’s liquidity position which remains in-line with the board’s expectations for FY23.”
AO said it still has full access to its £80 million revolving credit facility, which runs until April 2024.
The retailer also said it was considering and implementing a number of initiatives to further shore up its balance sheet and was optimising its focus on profit and cash generation due to the uncertain macro-economic conditions and the global supply chain issues.
AO revealed that it was to close its German operations last month after a strategic review. The retailer said the move would cost between nil and £15 million.
It said today that costs will be towards the lower end of estimates.