Asos shares have slumped after the fashion retailer confirmed it is talks with lenders over changing the terms of a £350 million (€405 million) borrowing facility.
The online retail firm told shareholders it is “in the final stages” of agreeing to an amendment to its financial covenants for its revolving credit facility. Asos said the move will give it “increased financial flexibility” amid an uncertain economic backdrop.
The company added: “Asos retains a strong liquidity position and this is a prudent step in the current environment.”
It was reported over the weekend that Asos had recently approached its banks, including HSBC, Barclays and Lloyds, to seek alterations to its borrowing agreements on the facility, which matures in 2024. The lenders have reportedly lined up specialists from AlixPartners and law firm Clifford Chance to advise them over the process.
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It comes two days before the ecommerce firm is set to reveal its trading figures for the past year to August.
Last month, Asos revealed that profitability would be towards to bottom of targets after sales fell below expectations in August amid clear signs customers were tightening their belts.
Shares were down 11.5 per cent at 470.16p on Monday morning.
The latest fall in Asos’ stock means the company has seen its share value fall by almost 80 per cent, or around £1.8 billion, since the start of the year. — PA
