Ocado to extend debt maturities as it looks to raise £600m

30th July 2024

Ocado is extending the maturity of its debt as it looks for fresh funding for its growth plans.

The grocery technology giant is looking to raise £600m through new bonds to finance a tender offer of its existing bonds that are due next year.

Ocado has launched an offering for £250m of guaranteed senior unsecured convertible bonds due in 2029 and a £350m offer of sterling-denominated senior unsecured notes due in the same year.

Holders of the group’s outstanding 0.875% senior unsecured convertible bonds due 2025 and 3.875% senior unsecured notes due 2026 to tender those securities.

It said net proceeds from the bond issues, together with cash from its balance sheet if needed, would be used to fund the tender offer.

Ocado said: “An appropriate financing policy and sufficient liquidity position continue to be an important foundation to enable investment in Ocado’s growth plans while maintaining a healthy financial profile.”

Earlier this week, the group’s chief executive Tim Steiner said he plans to retain the company’s stake in Ocado Retail, its joint venture with M&S, as the deal reaches its five-year milestone – a point at which either party could choose to sell their shares to the other.

Speaking to the Financial Times, Steiner said “I don’t want to sell the other half right now, so whether [M&S] want it or not is not massively relevant.”

His comments come as the group revealed at the start of the month that it had almost halved its pre-tax losses to £153.9m in the half to 2 June as it capitalises on more shoppers choosing to order their groceries online. Sales rose 12.6% to £1.54bn.

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