Ocado to extend debt maturity by raising £600m in bonds
According to Ocado, net proceeds from the new bond issues – together with cash from its balance sheet if needed – would be used to fund the tender offer
Ocado has extended the maturity of its debt by raising £600m in bonds which are due for repayment in 2029, an announcement on the London Stock Exchange has revealed, in a bid to refinance a tender offer of existing bonds due in earlier years.
It comes as the group launched an offering of £250m of guaranteed senior unsecured convertible bonds due 2029 yesterday (29 July), as well as an offer of £350m of sterling-denominated senior unsecured notes due in the same year.
In addition, the retail group has also invited holders of its outstanding 0.875% senior unsecured convertible bonds due 2025 and 3.875% senior unsecured notes due 2026 to tender those securities.
According to Ocado, net proceeds from the new bond issues – together with cash from its balance sheet if needed – would be used to fund the tender offer.
An Ocado spokesperson 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 in July, Ocado raised its margin guidance for the current financial year, with CEO Time Steiner saying that it did not need to raise additional capital due to its liquidity of over £1bn.
However, Ocado shares have depreciated by half over the last year. Steiner maintained that he was not concerned investors were losing confidence in the company’s business model, arguing the global shift to online grocery shopping had resumed.
