Ocado, the online grocery and technology group, has recently taken steps to extend the maturity of its existing debt. The company aims to raise £600 million through new bond issues to finance a tender offer for its existing bonds that are due in 2025 and 2026.
Ocado has launched an offering of £250 million of guaranteed senior unsecured convertible bonds due in 2029 and a £350 million offer of sterling-denominated senior unsecured notes due in the same year.
The company has 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 for purchase.
Ocado stated that the purpose of these financing transactions is to proactively extend the maturity profile of its debt. By doing so, the company aims to maintain an appropriate financing policy and sufficient liquidity position to support its growth plans while ensuring a healthy financial profile.
This move by Ocado is seen as a strategic step to strengthen its financial position and ensure long-term stability. By extending the maturity of its debt, the company can reduce its short-term financial obligations and free up resources to invest in its growth initiatives.
Additional Information:
Ocado’s share price has experienced a significant decline, exceeding 6% in some instances. This occurred primarily after the company announced its plans to extend debt maturities and raise additional funds through new bond offerings.
The new bonds are expected to carry a coupon of 6.25% per annum.
The bond offering is expected to settle on or around August 6, 2024.