Sainsbury's, the UK's third-largest grocer, said today (17 June) that it plans to launch a GBP445m (US$728.9m) fund-raising programme to accelerate its expansion in the UK.

The news sent Sainsbury's shares down in early trading - despite the company reporting a 7.8% rise in like-for-like sales during its first quarter.

Sainsbury's shares were trading at 316.25p at 09:02 BST this morning, down 4.7%.

Chief executive Justin King said the capital raising would help Sainsbury's "speed up" its growth in areas where it has low market share.

"The fund raising announced today will provide us with the financial flexibility to take advantage of current opportunities to grow our business further and faster," King said.

Sainsbury's will place a tranche of new ordinary shares in the company and issue convertible bonds due 2014 - moves it hopes will help raise around GBP445m.

The retailer also announced that it had bought nine stores from UK peer The Co-operative Group for GBP29m. The purchase follows a deal struck in March to acquire 29 stores from The Co-op for GBP83m.

Sainsbury's ambition is to grow its floor space by 15% - or 2.5m sq ft - by March 2011.

Commenting on Sainsbury's first-quarter results, King said customers numbers and basket size had grown thanks to "further investment in price and product ranges".

King said: "At the beginning of June we made a further significant investment in price and have now lowered 7,000 prices since January 2009. Consumers are spending more cautiously but continue to look to trusted brands to act responsibly on ethical and environmental concerns on their behalf. Sainsbury's continuous innovation gives us a leading position on such issues."

Sainsbury's total revenues for the 12 weeks to 13 June were up 3.2% - or 7.6% excluding fuel.