Morrisons has undertaken a major restructuring to successfully reduce its debt by £2.4 billion, marking a nearly 40% decrease.
Morrisons has effectively reduced its debt from £6.2 billion to £3.8 billion through a comprehensive restructuring effort. This includes extending its term loan facilities from 2027 to 2030, thereby lowering the cost of debt and the overall debt level. Additionally, the supermarket chain has prolonged its revolving credit facility to 2030.
This strategic move coincides with a credit rating upgrade from Moody’s, which has improved Morrisons’ owner’s rating from B2 to B1. This upgrade reflects the company’s reduced debt and extended maturities, with a shift in Moody’s outlook from “negative” to “stable”.
Jo Goff, Morrisons’ chief financial officer, expressed satisfaction with the rapid progress of the deleveraging programme, noting that debt levels are now around 40% lower than in October 2021. Goff highlighted ongoing investments in staff, pricing, store and logistics infrastructure, loyalty programmes, and fresh food manufacturing as key to building a more competitive and distinct Morrisons.
The financial restructuring follows positive sales results, as Morrisons reported a sales increase in its third quarter. A significant £331 million ground rent deal was also secured with Song Capital for 75 of Morrisons’ stores.
The debt reduction and strategic financial moves position Morrisons for enhanced stability and competitiveness in the retail sector.
