Ocado is set to raise more than £1 billion in equity as it aims to make the most of “significantly accelerated” interest in online groceries due to the pandemic.
The online grocery announced today that it is aiming to raise “gross proceeds of approximately £657 million” through an issue of new shares.
Additionally, it aimed to raise a further £350 million through a convertible bond offering, bringing the total to over £1 billion.
The retailer said the money will be used to fund its ambitious global expansion plans, including acquiring a string of new retail partners in key markets.
“As the migration to online globally gains pace, the Group believes that the global opportunity in its key target markets is around £2.8 trillion,” Ocado said.
“The current environment and accelerated shift online is expected to expand the addressable market with a fee opportunity for Ocado Group of £3.5‐26.3 billion depending on the level of online penetration reached in its key markets.
“The Group believes that the COVID‐19 pandemic is increasing interest in Ocado as grocery retailers around the world seek to accelerate the development of their online offer to customers.”
Ocado has reason to be so confident after seeing its share price skyrocket more than 85 per cent since the start of March, seeing its market capitalisation trump Sainsbury’s, Marks & Spencer’s and Morrisons combined.
While its retail arm has seen significant growth since the start of the pandemic, its key focus is on selling its solutions to other retailers like Kroger, Sobey’s in Canada and Casino in France.
Just last week Ocado announced that it was expanding its partnership with Kroger, the US’ largest grocery chain, and building three more of its signature automated fulfilment centres across the country.