In order to fund its ‘Driving Change’ turnaround strategy, which aims to bring the company back to sustainable profitability in the second half of the year and beyond, Asos has collected £ 75 million through a share placement.
Along with new financing arrangements, the move “provides financial flexibility and creates a stable base for Asos’ continued execution of its strategy and future return to growth,” the firm said. It also boosts cash creation.
J.P. Morgan Securities placed a total of 17,938,292 new common shares in the company’s capital. Additionally, Asos has received a new, £ 275 million, long-term finance facility.
With specialised lender Bantry Bay Capital Limited, the Company has signed into a £ 200 million senior term loan and a £ 75 million super senior revolving facility with a period that can be extended through April 2026.
These new facilities will take the place of the current £ 350 million revolving credit facility, which was extended and amended on 10th May 10 2023, along with the company’s interim results, and was scheduled to mature in November 2024.
Sales for the six months ending on 28th February 28 2023, were down 7 per cent to $1.84 billion, and pre-tax losses increased to £ 290.9 million, according to Asos’s interim figures.
The loss was primarily caused by the write-off of shares valued at £ 128.2 million and non-cash property impairment losses of £ 49.4 million resulting from closure expenses associated with the shrinking of the company’s headquarters and logistics footprint.
These actions are a part of its ‘Driving Change’ programme, which aims to reorient the company’s priorities away from short-term sales growth and towards profitability. The company declared the turnaround to be on schedule.
In order to get rid of unsold inventory, Asos recently signed a deal with the discount marketplace Secret Sales. This week, Asos also joined the rental market by partnering with Hirestreet.
Also Read: Asos forays into rental offering with Hirestreet with ‘wear it once’ rental
