Tesco looks to pay down £700m in debt

 
Caitlin Morrison
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Tesco is hoping to pay down debt (Source: Getty)

Supermarket Tesco has launched a tender offer for outstanding notes, in a bid to pay down as much as £700m in debt.

Shares in the company were up slightly, by 0.6 per cent, at the time of writing.

Offers have been launched for €1.25bn worth of its loan notes due in 2019, as well as £2.65bn worth of its sterling denominated notes due between 2019 and 2057.

The group said it will accept up offers for notes converting to a value of up to £700m, however, it reserves the right to accept "significantly more or significantly less than" such an amount.

"The offers are being made in the context of Tesco's continuing efforts to strengthen the balance sheet and are aimed at efficiently using surplus liquidity to reduce gross debt," the group said.

The euro notes will be subject to a fixed purchase yield of -0.10 per cent. Prices for the other notes will be determined by 1pm on October 25.

In order to participate in the offer, noteholders must deliver a tender instruction by 5pm on 24 October.

Tesco recently unveiled its first dividend in three years, after reporting profits rose 667 per cent in the first half. Analysts welcomed this signal that the supermarket's turnaround, led by chief executive Dave Lewis, was set for success.

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