Morrisons has successfully reduced its substantial debt by nearly 40%, marking a key achievement in its financial strategy.
Morrisons, the prominent UK supermarket chain, has made significant strides in financial restructuring by cutting its debt from £6.2 billion to £3.8 billion. This represents a reduction of around 40%, a notable turn for the company. The restructuring involved extending term loan facilities from 2027 to 2030, alongside a reduction in both the cost and level of debt. Furthermore, Morrisons extended its revolving credit facility to 2030.
The move comes after Moody’s, the credit rating agency, upgraded the credit status of Morrisons’ parent company, Market Holdco 3 Limited, from B2 to B1. This upgrade is reflective of the company’s reduced debt obligations and the extension of its debt maturities. As a result, Moody’s has altered its outlook on the company from ‘negative’ to ‘stable’.
Jo Goff, Morrisons’ Chief Financial Officer, remarked on the achievement, expressing satisfaction with the rapid progress of their deleveraging strategy. She noted that their debt levels are now significantly reduced compared to October 2021, and highlighted the company’s ongoing investments in its personnel, pricing, store and logistics infrastructure, loyalty programmes, and fresh food manufacturing as essential components of their plan to fortify Morrisons with traditional values and modern retail practices.
The news follows Morrisons’ latest quarterly results, which showed a slight increase in sales during the third quarter. The supermarket also announced a £331 million ground rent deal with real estate investor Song Capital across 75 of its stores.
Morrisons’ decisive actions in debt reduction and strategic investments exemplify its commitment to establishing a robust and competitive market presence. With a focus on strengthening operations and financial stability, the retailer appears well-positioned for future growth.
