After announcing on Friday that it had signed another grocery delivery technology partnership, this time with Japanese retailer Aeon, Ocado has today launched a £500m convertible bond offering, partly to fund the construction of its automated warehouses for its partner retailers overseas.
The net proceeds of the issue of the Bonds will be used to fund capital expenditure by its Ocado Solutions unit and general corporate purposes. The group stated that the offering enables it to diversify its funding sources and “capitalise on attractive issuance conditions”.
Alongside the bond offering, the company revealed that its Ocado Retail division was on track to deliver revenue growth of 10% to 11% in the 13 weeks to 1 December, compared to a third quarter increase of 11.4%. It added that growth in orders including those for Ocado Zoom, its rapid delivery service, were slightly higher than retail revenue growth.
A full fourth quarter trading update is scheduled for 12 December.
Having surged over 10% on Friday following the Aeon announcement, Ocado shares were down over 5% this morning as the bonds can be converted into shares.
NAM Implications:
- Given its recent sales performance…
- …and the potential of its foothold in Asia…
- Ocado should have no difficulty in raising extra funds.
- Time to network your overseas colleagues and brief them on Ocado UK?
