Morrisons successfully reduced its debt by £2.4 billion through strategic restructuring.
- The company’s debt decreased from £6.2 billion to £3.8 billion, nearly a 40% reduction.
- Key restructuring actions included extending loan facilities and reducing debt costs.
- Moody’s upgraded Morrisons’ credit rating due to improved financial stability.
- Morrisons’ sales rose by 2% during the third quarter, achieving key strategic goals.
Morrisons has effectively reduced its debt load by £2.4 billion, a move that marks a substantial step in the company’s financial strategy following its acquisition by Clayton, Dubilier & Rice. This reduction cuts nearly 40% from its previous debts, bringing it down from £6.2 billion to £3.8 billion.
The restructuring involved crucial financial adjustments such as extending the maturity of its Term Loan Facilities from 2027 to 2030, which has also resulted in a lower cost for the debt. Additionally, the retailer has extended its Revolving Credit Facility to 2030, further strengthening its financial position.
As a result of these strategic financial maneuvers, Moody’s has improved the credit rating of Morrisons’ parent company, Market Holdco 3 Limited, lifting it from B2 to B1. Alongside this upgrade, Moody’s has shifted its outlook for the company from ‘negative’ to ‘stable’, reflecting the improved debt profile and extended maturities.
Jo Goff, Morrisons’ Chief Financial Officer, expressed satisfaction with the progress of this deleveraging strategy, stating, “I’m very pleased with the rapid progress of our deleveraging programme and our debt levels are now around 40% lower than in October 2021, whilst our retail estate remains over 80% freehold.” This underscores the company’s commitment to enhancing operational efficacy while maintaining traditional values through modern practices.
In the latest financial results, Morrisons showed an increase in sales of 2% in its third quarter, amounting to nearly £4 billion. This growth was driven by progress across its strategic pillars: commercial excellence, operations optimisation, and new value creation. These initiatives have been fundamental to Morrisons’ plans to become a stronger, more competitive entity.
Morrisons’ strategic debt restructuring and operational improvements position the company for future growth and stability.
