Struggling British supermarket group Asda has raised an additional loan of £155 million to help it pay back debt due in the next two years, the retailer said on Wednesday.
Asda – the UK’s third-largest grocer – said the loan, alongside a similar amount of cash from its balance sheet, will address £310 million of debt due to mature in 2025 and 2026.
The move, following on from a £3.2 billion refinancing in May, pushes out all of Asda’s near-term debt maturities into the next decade, giving management breathing room to engineer a recovery.
It is the first significant development since veteran retailer Allan Leighton returned to Asda as executive chairman last month, more than two decades after he served as CEO when he turned around the business before selling it to Walmart.
Asda is now owned by private equity firm TDR Capital and Mohsin Issa, though Walmart retains a 10% stake.
Walmart’s stake in preference shares has a value of around £500 million in Asda’s books.
It accrues interest and will be worth about £900 million when it matures in 2028, according to an Asda spokesperson.
Asda has been losing market share to rivals, including industry leader Tesco and number-two Sainsburys, according to monthly data.
Last month, Asda reported a 4.8% fall in third quarter to end-September like-for-like sales and warned that measures in the new Labour government’s budget would cost the group £100 million in extra costs.
Asda’s net debt was £3.8 billion at the end of September.
The group said on Wednesday, “Asda remains focused on prudently managing the capital structure in the long-term.”
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