Morrisons has announced a substantial reduction in its debt, achieved through a comprehensive restructuring process. The supermarket chain has managed to lower its total debt by £2.4 billion since its acquisition by Clayton, Dubilier & Rice. This debt reduction includes an additional repayment of £200 million.
- The company’s debt now stands at £3.8 billion, a notable decrease of nearly 40% from the previous £6.2 billion.
- Key steps in the restructuring involved extending loan maturities and reducing borrowing costs, effectively strengthening Morrisons’ financial position.
- Moody’s has upgraded the credit rating of Morrisons’ parent company, Market Holdco 3 Limited, reflecting confidence in the company’s improved financial stability.
- Morrisons’ strategic investments in colleagues, pricing, logistics, and fresh food manufacturing are expected to bolster its competitive position.
Morrisons, a leading supermarket chain, has successfully completed a significant restructuring of its debt profile. Through decisive actions, the company has managed to lower its debt by £2.4 billion since it was acquired by Clayton, Dubilier & Rice. This includes a further reduction of £200 million in debts. The reduction in debt represents a substantial decrease of nearly 40%, lowering the company’s obligations from £6.2 billion to £3.8 billion.
Part of this restructuring involved the extension of Morrisons’ Term Loan Facilities from 2027 to 2030. In addition, the retailer successfully reduced the cost of its borrowings, alongside decreasing the overall level of debt. These financial manoeuvres have not only improved Morrisons’ fiscal health but also extended its Revolving Credit Facility term to 2030, providing additional fiscal breathing space.
In recognition of these efforts, Moody’s, a prominent credit rating agency, has revised its rating for Morrisons’ parent company, Market Holdco 3 Limited, from B2 to B1. This upgrade, which reassesses the grocer’s debt load and extended debt maturities, comes with a revised outlook from ‘negative’ to ‘stable.’ This improved rating reflects a growing confidence in Morrisons’ stronger financial footing.
Jo Goff, Morrisons’ Chief Financial Officer, expressed contentment with the company’s progress, noting that debt levels are now substantially lower. She highlighted that about 80% of the company’s retail estate remains freehold, a factor contributing to the company’s robust fiscal resilience.
Furthermore, Morrisons’ operational progress continues to show positive trends as investments in employees, pricing strategy, store logistics, and fresh food production persist. These efforts are designed to enhance Morrisons’ competitive edge and underline its commitment to more traditional corporate values harnessed through modern retail practices.
During its latest financial reporting period, Morrisons experienced a slight yet positive uptick in sales during its third quarter. From 29 April to 28 July, sales increased by 2%, reaching nearly £4 billion, as the company made headway across its strategic pillars: commercial excellence, operational optimisation, and value generation.
Morrisons’ debt restructuring marks a critical step in refining its financial strategy, enhancing its stability and market competitiveness.
