Asos (ASC.L) has successfully raised £247m ($304m) from investors to help it survive the coronavirus pandemic.
The online fashion retailer said on Wednesday it had successfully placed 15.8m of new shares with investors. Shares were sold at £15.60 each — a slight premium to Tuesday’s closing price — and 95% were sold to existing investors.
The new shares issued represent approximately 18.8% of the business prior to issue.
Asos’s stock was trading 32.9% higher to £20.62 on Wednesday morning after the successful capital raise.
Asos first announced plans to raise extra capital on Tuesday afternoon. The company said it was also negotiating an extension to its credit facility and was talking to the Bank of England about accessing its corporate credit support programme.
The company said the financing activity would “strengthen the balance sheet and enable Asos to exit this disruptive period in a strong position.” It said the proceeds raised would allow the business “to weather no improvement in current trading for at least 18 months.”
Asos also released its interim results late on Tuesday, showing sales were strong prior to the COVID-19 outbreak. Revenue rose 21% to £1.5bn in the six months to 29 February and pre-tax profit rebounded 653% to £30.1m.
Revenue growth was ahead of analysts’ forecasts. Greg Lawless and Clive Black, retail analysts at Shore Capital, said the numbers showed “continued momentum” in the business.
However, Asos said recent sales had been “significantly impacted” by lockdowns around the world. Sales in the most recent three weeks were down between 20% and 25%.
“The COVID crisis is clearly going to continue to be tough for everyone and the short-term outlook remains highly uncertain, but the measures we have taken ensure we are able to be clearly focussed on making sure that ASOS emerges as a stronger and better business,” chief executive Nick Beighton said in a statement.
Lawless and Black said: “The outlook statement highlights the uncertainty from Covid19 but the equity raise of £247m and debt refinancing means that the company now has a balance sheet and significant liquidity to weather the current storm.”