6th Jul 2022 15:19
(Alliance News) - AO World PLC on Wednesday said it has raised GBP40.3 million through a placing and PrimaryBid offer of shares, in order to strengthen its balance sheet.
Through the placing, the online electricals retailer issued 86.6 million shares at a price of 43 pence per share, to raise GBP37.3 million. Meanwhile, through the PrimaryBid offer, AO World issue 7.2 million shares at the same issue price as the placing, to raise GBP3.1 million.
Jefferies and Numis Securities acted as joint bookrunners and global coordinators.
The share issue price is at an 8.5% discount to Tuesday's closing price of 47.0 pence.
Shares in AO World were 8.6% lower at 42.96 pence on Wednesday afternoon in London. The stock has lost 36% since the start of the week.
AO World had confirmed in a statement on Monday that it was aware that one of the third-party credit insurers which provides credit insurance to some of its suppliers had rebased their cover in May with respect to AO World, reflecting post-Covid sales levels.
It followed a report in the Sunday Times which stated that Atradius, a credit insurer, cut its credit cover for the online retailer's suppliers. Credit cover is crucial aspect of the retail supply chain. It provides cover for firms should customers not pay debts in time or at all.
Also on Wednesday, AO World said first quarter trading was "materially in-line with the board's expectations".
"We are very pleased with the level of support that we have received from investors. This is a strong endorsement of our strategy to create value by offering our customers brilliant customer service and make AO the destination for everything they need when buying electricals. Notwithstanding the current macroeconomic conditions, we see significant long-term growth opportunities for AO in the UK and this placing will help us to realise them," said Chief Executive Officer John Roberts.
AO World now has 573.3 million shares issued overall.
By Dayo Laniyan; [email protected]
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