Ocado to raise £36 million through new share placing
Online grocer Ocado has announced that it has secured more time to pay off its debts and that it will raise £35.8 million through a placing of shares to fund an expansion of the business.
Ocado’s existing lenders, Barclays, HSBC and Lloyds, have agreed to extend the maturity of the company's existing £100 million capital expenditure facility for a further 18 months to 6 July 2015. In addition, the company will also raise £35.8 million through a sale of shares to existing investors at 64p a share - a premium of 5.7% to the closing price on Friday of 60.55p.
Tim Steiner, Ocado chief executive, said: "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."
The company also gave an update on current trading, saying that sales growth had accelerated in recent weeks. Gross sales rose 11% in the 14 weeks to 11 November and increased by 13.7% in the final six weeks of the period.
Weekly orders reached 140,000 per week for the first time in November 2012. In addition, the company has completed construction of a Customer Fulfilment Centre (CFC2) in Dordon with fulfillment of customer orders planned to begin in February 2013.
Duncan Tatton-Brown, chief financial officer, said the placing and early extension of the company’s existing facilities would help Ocado to deliver growth by increasing its range and enhancing the customer customer shopping experience. He added: "It also gives us greater flexibility to invest in various marketing initiatives around the opening of CFC2 and significantly expand our non-food offering."
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