ASOS confirms reports regarding revolving credit facility
The company said the move will increase financial flexibility
ASOS shares fell more than 7% following the news
ASOS (LON: ASC) shares slipped further Monday morning after the company released a statement confirming it is in the final stages of talks to agree on terms to amend the terms in its Revolving Credit Facility.
The news was reported by various outlets over the weekend, which stated the company approached the banks behind its £350m revolving credit facility recently in an attempt to seek an amendment to the borrowing agreements.
Sky News sources told them that lenders such as HSBC, Barclays and Lloyds Banking Group were “lining up AlixPartners and law firm Clifford Chance to advise them on the unfolding situation.”
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In a statement today, ASOS confirmed the final stages of talks to agree on an amendment for its Revolving Credit Facility, which matures in July 2024.
“This action will give ASOS significantly increased financial flexibility, against the uncertain economic backdrop,” the online fashion retailer said. “ASOS retains a strong liquidity position and this is a prudent step in the current environment.”
ASOS Daily Chart – Source: IG
ASOS shares tumbled over 7% in early Monday trading, while they are down almost 80% in 2022.
In its most recent trading statement on September 9, ASOS said sales in August were weaker than anticipated due to the impact of surging inflationary pressures on consumers and a slow start to Autumn/Winter shopping. The company added that profit is expected to be around the bottom end of guidance.
Sam is a trader and lead stock market writer at AskTraders. After starting his career in the forex market, Sam now focuses on stocks, specifically consumer staples.
