British supermarket group Asda has raised an additional loan of £155 million (€187.55 million) to help it pay back debt due in the next two years.
Asda, Britain's third largest grocer, said the loan, alongside a similar amount of cash from its balance sheet, will address £310 million (€375.1 million) of debt due to mature in 2025 and 2026.
The move, following on from a £3.2 billion (€3.87 billion) refinancing in May, pushes out all of Asda's near-term debt maturities into the next decade, giving management breathing space to engineer a recovery.
Allan Leighton
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 (€605 million) in Asda's books. It accrues interest and will be worth about £900 million (€1.09 billion) when it matures in 2028, according to an Asda spokesperson.
Asda has been losing market share to rivals, including industry leader Tesco and No. 2 Sainsbury's, according to monthly data.
Third-Quarter Sales
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 (€121 million) a year in extra costs.
Asda's net debt was £3.8 billion (€4.6 billion) at end-September.
"Asda remains focused on prudently managing the capital structure in the long term," it said on Wednesday.
