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(Sharecast News) - Ocado said on Monday that it was planning to raise £575m in a share placing to help fund its expansion, as it announced a new £300m banking facility.
The online supermarket said it would raise the funds through a placing of new shares, "to give the company enough liquidity to fund the requirements of its existing and expected customer commitments into the mid-term, driving strong growth and returns in the future".
It also said it had agreed a new £300m revolving credit facility with a syndicate of "leading international banks" and reiterated full-year guidance.
The placing will be conducted through an accelerated bookbuild and the price at which the shares are placed will be determined at the close of the bookbuild.
Ocado said the online grocery market continues to show "significant" growth and that it needs to "bring solutions to market even faster".
"The shift to online grocery accelerated significantly with the Covid-19 pandemic and industry data suggests that this change will continue, as customers continue to demand greater convenience for their online shopping," it said. "Ocado Group continues to make the most of the ever-growing demand by ramping up capacity, both by reaching new geographies and expanding their ability to deliver to customers within these areas.
"The urgency to bring online grocery solutions to market is at the forefront of customers' minds."
Proceeds from the placing will allow Ocado to "capitalise on the opportunity set over the medium term". This includes supporting its current Ocado Solutions partners as the increase in online grocery demand globally requires faster growth in fulfilment capacity; continued investment in innovation and at a faster pace; and the further expansion of its leadership position.
Ocado also announced the launch of a separate £6.9m retail offer.
In a trading update in May, Ocado Retail - Ocado's joint venture with Marks & Spencer - warned on profits, pointing out that the trading environment had deteriorated, with the cost of living crisis compounding the impact of a return to more normal consumer behaviours as Covid restrictions ended and more people returned to the office.
