ASOS cuts net debt load by £150 million

ASOS cuts net debt load by £150 million

Published



September 11, 2024

ASOS’s news last week that it was selling majority control of Topshop and Topman and refinancing its debt appears to have had a very positive impact on its overall net debt position, it showed on Wednesday.

Reuters

In a stock exchange release, the fashion e-tail giant said that the net proceeds from the sale of the majority stake to a joint venture with a vehicle controlled by Bestseller owner Anders Hoch Povlsen and the discounted repurchase of Convertible Bonds due in 2026, meant the net debt position has been reduced by around £150 million.

That joint venture was unveiled late last week and came despite unconfirmed reports that a much higher offer for Topshop and Topman had come in via a Shein/Authentic Brands Group link-up.

As for the bonds, ASOS said that “following the successful placement of Convertible Bonds due 2028 and concurrent repurchase of outstanding Convertible Bonds due 2026, ASOS confirms that £253 million was exchanged into the Convertible Bonds due 2028, from the Convertible Bonds due 2026, £173.4 million of the Convertible Bonds due 2026 was accepted for repurchase, and £73.6 million remains in the Convertible Bonds due 2026”.

The news seemed to please investors as ASOS shares edged up slightly in early trading on Wednesday. But while the rise was less than 1%, it came on top of a much bigger jump after the Topshop deal had been announced.

The shares are up over 13% in the past week and over 20% in the past month, ending the overall downward trajectory that began three years ago as the benefits it got from pandemic lockdowns started to unravel.

It means the company’s market value is now over half a billion pounds. But before we get carried away, it’s worth remembering that it was about 16 times higher at one point in 2018 so the company still has a long way to go to recover past glories and may never get back to the heady heights it once reached.

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