Tesco share price fell again today – though far less than in recent days – after it emerged the embattled supermarket had sought a £2.5bn banking facility to prop it up against any impact from credit ratings downgradings.
The supermarket was 0.4 per cent down in early trading today, with its share price continuing the downwards trajectory that took hold last week when management revealed there was a £250m black hole in its profit.
The company suspended four executives and launched an investigation, but has also attracted the attention of regulator the Financial Reporting Council.
Ratings agencies Moodys and Standard & Poor's put Tesco on a negative credit watch following the news, saying Tesco's business risk profile was "strong".
According to Sky News, Tesco has approached between four and six unnamed banks for the loan, which would temporarily replace an existing arrangement of a similar size.
Although it would be more expensive for Tesco to take out, Sky said the new deal offered greater flexibility because it was not contingent on downgrades to its credit rating or breaches on other borrowing covenants.
Tesco declined to comment, beyond saying it “continues to have a strong funding and liquidity position”.