Shares in Ocado surged this morning (19 November) as the UK online retailer said it had extended its debt facility and would raise GBP35.8m (US$57m) in a placing to fund expansion of the business.
In an announcement today, the retailer said its existing lenders Barclays, HSBC and Lloyds had agreed to extend the maturity of a GBP100m capital expenditure facility by 18 months to July 2015. The group also launched a GBP35.8m share placing through the sale of 55.8m new shares. Ocado’s stock was up 26.5% at 76.60 pence at 12:13 GMT.
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The retailer said the proceeds of the placing will “strengthen the company’s balance sheet and support the continued growth of Ocado”.
It also provided a trading update for the 14 weeks to 11 November and said it achieved year-on-year gross sales growth of 11%.
Ocado, which is struggling against better service propositions from its supermarket rivals, has struggled to make a profit since its flotation in July 2010. In June the retailer reported flat first-half profits and in September reported a slowdown in sales growth in the third quarter.
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