Morrisons has successfully completed a significant debt restructuring process.
- The supermarket chain reduced its debt by nearly 40%, from £6.2 billion to £3.8 billion.
- This achievement was supported by extending its Term Loan Facilities and Revolving Credit Facility to 2030.
- Moody’s improved its credit rating for Morrisons’ parent company, reflecting enhanced fiscal health.
- Morrisons’ third-quarter sales increased, aligning with its strategic investment goals.
Morrisons, a leading supermarket chain, has completed a substantial debt restructuring, trimming its liabilities by £2.4 billion. This restructuring included paying off an additional £200 million, significantly reducing the total debt from £6.2 billion to £3.8 billion. The debt reduction marks nearly a 40% decrease since Morrisons’ acquisition by Clayton, Dubilier & Rice.
A critical part of this financial overhaul involved extending its Term Loan Facilities from 2027 to 2030. Additionally, Morrisons has revamped its Revolving Credit Facility, also extending its maturity to 2030. These moves have helped in lowering the overall cost of debt, as well as reducing the principal amount, positioning the company on firmer financial footing.
In the wake of this restructuring, credit rating agency Moody’s upgraded Morrisons’ parent company, Market Holdco 3 Limited, from a B2 to a B1 rating. This shift in credit rating reflects a more stable outlook, thanks to the retailer’s reduced debt and extended debt maturities. Moody’s also adjusted its outlook on Morrisons from “negative” to “stable,” further highlighting the positive impact of the company’s debt management strategies.
Jo Goff, Morrisons’ Chief Financial Officer, expressed satisfaction with the progress of the debt reduction program. She noted that the company’s debt levels are now approximately 40% lower than in October 2021, with the majority of its retail estate remaining over 80% freehold. Investments in staff, competitive pricing, logistics, the Loyalty program, and fresh food manufacturing remain central to Morrisons’ strategy to strengthen its market position.
During its latest quarterly report, Morrisons announced a minor rise in sales for the third quarter, with a 2% increase bringing sales to nearly £4 billion. This growth aligns with its three strategic pillars: commercial excellence, operations optimization, and new value creation, which are part of Morrisons’ efforts to innovate while maintaining its foundational values.
Morrisons’ strategic financial decisions have not only reduced debt but also set it on a path for sustainable growth.
