Morrisons has achieved significant success by cutting its debt by £2.4bn, representing a reduction of nearly 40% through strategic restructuring efforts. The company extended its term loan facilities and revolving credit, improving long-term financial stability. Credit rating agency Moody’s responded positively, upgrading Morrisons’ credit rating and outlook. Strategic investments continue, signalling further operational progress. Recent financial results show a notable increase in sales.
Morrisons announced a substantial reduction in its debt, achieving a decrease from £6.2bn to £3.8bn. This nearly 40% reduction was accomplished through a comprehensive restructuring of its financial obligations. The restructuring involved extending the terms of its loan facilities by three years, now maturing in 2030, and reducing both the cost and amount of debt.
The financial restructuring has seen Morrisons extend its revolving credit facility term to 2030, which demonstrates the company’s commitment to long-term financial stability. This strategic move enhances the liquidity position of the supermarket chain, providing a solid foundation for future growth and investment.
Moody’s, a renowned credit rating agency, acknowledged this reduction in Morrisons’ debt. The agency upgraded the credit rating of Morrisons’ parent company, Market Holdco 3 Limited, from B2 to B1. Simultaneously, it altered the outlook from ‘negative’ to ‘stable’, reflecting enhanced confidence in the company’s financial health and its ability to meet future obligations.
The Chief Financial Officer of Morrisons, Jo Goff, expressed satisfaction with the progress made in reducing the debt levels, highlighting that the deleveraging programme had swiftly lowered debt levels by 40% since October 2021. Goff noted that Morrisons will continue to invest in key areas, including staffing, pricing, logistics, and food manufacturing, aligning with a strategy to build a stronger and more competitive business.
Morrisons also reported an increase in sales during the third quarter, though specific figures were not disclosed. Additionally, the supermarket secured a ground rent agreement worth £331m with Song Capital, covering 75 stores, further strengthening its financial position.
These measures position Morrisons favourably for future growth and operational success.
