Retailer ASOS plans equity increase, more debt, to weather coronavirus crisis

Credit: REUTERS/SUZANNE PLUNKETT

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LONDON, April 7 (Reuters) - British online fashion retailer ASOS ASOS.L said on Tuesday it was close to finalising a potential equity increase and extension to its debt facilities to ensure it can endure the coronavirus emergency.

The group, which sells fashion aimed at 20-somethings, has kept going during the national lockdown in line with government guidance that online retail can continue.

It said it had been monitoring the ongoing financial impact of COVID-19 on its business and had been evaluating a number of different scenarios.

The company has stress tested its liquidity under these scenarios and was comfortable that, with mitigating actions, there was sufficient liquidity within its existing 350 million pounds ($431 million) facility.

"Whilst the company's financial position remains robust, the duration and impact of the COVID-19 related crisis remains uncertain and ASOS wants to ensure it can weather and exit the current trading environment in a position of strength," it said, adding that a further announcement would be made shortly.

The retailer is due to publish first-half results on Wednesday.

ASOS said it performed well in the period with sales growth in excess of 20% and progress in cutting non-strategic costs.

This combined with a stronger performance than anticipated in the January and February sale period, had resulted in a "strong first-half profit and earnings before interest and tax (EBIT) margin."

Shares in ASOS closed up 34%, paring 2020 losses to 54%.

($1 = 0.8113 pounds)

(Reporting by James Davey; editing by Stephen Addison and Jane Merriman)

((james.davey@thomsonreuters.com))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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