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Ocado Plans to Borrow From Bond Market for First Time Since 2021

Grocery delivery trucks at an Ocado fulfillment center in Enfield, UK. (Hollie Adams/Bloomberg)

(Bloomberg) -- Ocado Group Plc is looking to sell its first bonds in nearly three years, a couple of weeks after the provider of robotic warehouses reported that it had narrowed its losses.

The British company has launched a £350 million ($450 million) junk-bond offering, and is also marketing around £250 million ($321 million) of guaranteed senior convertible bonds, according to a regulatory filing. Both sets of bonds will mature in 2029. 

Proceeds from the deal will help fund the purchase of debt due 2025 and 2026 via a tender offer, according to a statement. 

Ocado was last active in the public-debt markets in 2021, when it sold £500 million in high-yield bonds. The company recently reported that it had nearly halved its pretax loss for the first half of the year to £154 million — a better result than analysts expected — and said cash flow is improving. 

The firm, which was founded by three former Goldman Sachs bankers, sees its future as a maker of automated warehouses for supermarkets around the world. But key customers including US grocer Kroger Co. and Canada’s Sobeys have slowed their roll-out of new warehouses, hindering the company’s ambitions. 

Most of its revenue still comes from the online-grocery venture it shares with Marks & Spencer Group Plc.

--With assistance from Hannah Benjamin-Cook.

©2024 Bloomberg L.P.