Ocado piles on debt in a race to expand

INTERNET food retailer Ocado has raised £17m in a second round of debt financing to fund ambitious growth ahead of a planned stock market float.

Ocado, the online delivery service for the Waitrose supermarket chain, has signed on the dotted line for new debt facilities of £8m from Barclays and £9m from HSBC, on top of £20m agreed with Lloyds TSB last month.

Details of the loans appear in documents filed at Companies House on Christmas Eve.

Co-founder and finance director Jason Gissing told the Mail: 'We've raised a lot of bank debt as part of our aggressive expansion plans.'

Gissing said Ocado wants to expand from its single Hertfordshire warehouse to a total of five in the next few years, at a combined cost of £120m. But he downplayed reports that the firm plans to raise £20m of new equity capital by the end of March.

'We never look at raising more than £20m in one go. While there is a strong possibility we will raise money this year, no timescale has been set,' he said.

His comments come in spite of Companies House documents showing the passing of a special board resolution to allow 400,000 new shares to be issued at a total value of almost £60m.

Ocado hopes to float within three years, bringing a bumper pay day for investors including the John Lewis Partnership and Tetra Pak heir Jorn Rausing.