AO looks to raise £40m to boost liquidity

AO World
// AO looks to raise £40m through a share placing to boost liquidity
// The electricals retailer will be offering investors new shares at 43p per share

AO is seeking to raise £40 million through a share placing less than a week after its credit insurance for suppliers was cut.

The electricals retailer said the funds will be raised through a book-building process offering investors new shares at 43p per share and a separate offering through the PrimaryBid platform.

The proceeds are expected to increase AO’s liquidity and provide “flexibility to capitalise on market opportunities”.


READ MORE: AO confirms credit insurance ‘rebased’, insists liquidity remains intact


Jefferies and Numis have stepped in as joint global coordinators, joint bookrunners and joint brokers.

AO said it needed the fresh cash injection after “an unprecedented environment for business planning” following challenges brought on by the pandemic.

AO’s finances were recently in question after Atradius cut its credit cover.

Atradius provides credit insurance for AO’s suppliers, protecting them against the risk of the business going bust and leaving orders being made and not paid for.

AO revealed that current trading and financial performance during the first quarter was “materially in-line” with expectations.

But it remained “mindful of the ongoing volatile and challenging macroeconomic environment and continuing supply chain disruption”.

“In addition to being a sensible piece of financial house-keeping given the short-term macroeconomic uncertainty, this Capital Raise will give us the necessary foundation from which to go after the significant long-term growth opportunities that we see for AO in the UK,” chief executive officer John Roberts said.

“It will also allow us to deliver on the new financial targets that we are setting today.

“Our core major domestic appliance category is proving to be resilient over time, given the natural replacement cycle of white goods and their non-discretionary nature.

“In addition, expanding into newer categories remains a key priority and a major opportunity for us. I remain hugely optimistic about the future of our business underpinned by the fantastic people we have in it and the way they amaze our customers every day.”

Click here to sign up to Retail Gazette‘s free daily email newsletter

LEAVE A REPLY

Please enter your comment!
Please enter your name here