June 12, 2017 / 10:21 AM / 7 months ago

Online supermarket Ocado to raise 350 million pounds to support growth

LONDON (Reuters) - Britain’s Ocado plans to raise at least 350 million pounds ($446 million) from issuing bonds and making changes to its banking facilities, money that the online food retailer will use to expand capacity and develop software, it said on Monday.

Ocado, which last week clinched a long awaited overseas deal with an as yet unnamed European retailer, also published its results for the 22 weeks to April 30, showing a strong increase in sales.

Gross retail sales were up by almost a quarter to 600 million pounds, earnings before interest, tax, depreciation and amortisation (EBITDA) increased 20.5 percent to 37.6 million pounds while pretax profit rose 45.7 percent to 6.7 million pounds.

However, the figures were flattered as they covered a 22-week period compared with 20 weeks in the previous year.

The group said it would raise a minimum of 200 million pounds through an offering of senior secured notes.

FILE PHOTO: A general view shows conveyer belts transporting crates filled with packed bags inside the Ocado Customer Fulfilment Centre in Hatfield on the outskirts of London, Britain, April 6, 2016 . REUTERS/Dylan Martinez/File Photo

Additionally it plans to secure about 150 million pounds through the amendment and extension of its revolving credit facility.

“The board believes that with its continued strong trading, increased scale and profitability, Ocado can benefit from the historically low financing costs in the public debt markets to put in place longer maturity financing on attractive terms,” it said.

As of April 30, external net debt was 98.7 million pounds.

Shares in Ocado have had a roller coaster ride since listing at 180 pence in 2010.

They were down 2.7 percent at 282.3 pence at 1005 GMT, valuing the business at 1.8 billion pounds.

Reporting by James Davey; Editing by Keith Weir

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