Sainsbury’s has announced plans to borrow £400m through issuing a five-year convertible bond to increase its cash for refinancing.
The supermarket will use the cash to refinance its £248m acquisition of the remaining 50 per cent stake in Sainsbury’s Bank it acquired back in January. The funds will also refinance of £190m convertible bonds it redeemed in July.
The company's shares ticked up two per cent in early trading this morning, one of the FTSE 100’s biggest risers.
It comes days after the supermarket reported its worst first half performance in more than a decade and revealed plans to cut £500m of costs, with a bleak outlook for growth in the sector.
Sainsbury’s boss Mike Coupe said earlier this week that Sainsbury's had "good foundations" for future growth. "However, we need to make sure that we are investing in the right areas and by reducing our costs and capital expenditure we are ensuring that we have the resources to enable us to do so."