Morrisons has successfully reduced its debt by nearly 40%, amounting to a reduction of £2.4bn, through a significant restructuring process.
- The supermarket chain achieved this by cutting its debt from £6.2bn to £3.8bn and extending its term loan facilities by three years to 2030.
- A notable aspect of the restructuring includes an extension of Morrisons’ revolving credit facility to 2030, targeting long-term stability.
- The restructuring initiative coincided with a credit rating upgrade for Morrisons’ parent company, reflecting improved financial health.
- Chief Financial Officer Jo Goff underlined the strategic investments underpinning Morrisons’ stronger financial position.
Morrisons has taken decisive steps in addressing its financial obligations by cutting its outstanding debt by £2.4 billion. Through extensive restructuring, the supermarket giant reduced its total debt from £6.2 billion to £3.8 billion, reflecting a strategic move to ensure long-term financial health. This reduction was achieved by extending term loan facilities from 2027 to 2030, effectively easing the immediate financial pressures and decreasing both the cost and level of debt.
In tandem with extending term loans, Morrisons also lengthened its revolving credit facility out to 2030. These measures afford Morrisons greater flexibility in managing its capital and operational needs, fortifying the company against potential economic fluctuations and providing a more secure financial footing.
The restructuring effort led to a credit rating upgrade by Moody’s, boosting the rating for Morrisons’ owners, Market Holdco 3 Limited, from B2 to B1. This upgrade signifies a more stable financial outlook for the company, with Moody’s revising its perspective on Morrisons from ‘negative’ to ‘stable.’ Such ratings improvements highlight the market’s confidence in Morrisons’ fiscal management.
Morrisons’ Chief Financial Officer, Jo Goff, expressed satisfaction with the company’s progress. According to Goff, the debt levels are now about 40% lower than in October 2021, signaling significant advancement in Morrisons’ deleveraging program. Goff emphasized the importance of ongoing investments in the company’s infrastructure and operational processes, stating these moves are vital for making Morrisons more competitive and efficient.
The fiscal improvements were reported following Morrisons’ latest quarterly results, which showed a rise in sales. The company also secured a £331 million ground rent deal with Song Capital, covering 75 of its stores. This agreement is part of Morrisons’ broader strategy to enhance its real estate portfolio and financial strategies.
Morrisons’ significant debt reduction and strategic fiscal planning underline its commitment to financial stability and operational competitiveness.
