Asos taps investors with cut-price share sell-off

A SALE of cut-price Asos shares today raised £75 million for the fast fashion retailer as it tapped City investors for help bolstering its balance sheet.

Alongside last night’s placing of new shares, the FTSE 250-listed firm unveiled a new long-term £275 million financing facility with an 11% interest rate.

It also hopes to raise £5 million by offering retail investors the chance to buy shares at last night’s closing price of 418.1p. The shares were near to 1500p a year ago but have been stung by falling revenues and uncertainty in the early stages of a turnaround plan. Shares touched 455p this morning as the fundraising ended weeks of speculation over the company’s intentions, but later reversed to stand 4.3p lower at 413.8p.

The fallback for Asos was mirrored by the rest of the London market, with the FTSE 100 index 5.84 points higher at 7576.71 compared with a gain of 0.7% earlier on.

The performance left London’s top flight 175 points lighter in a week of worries about the US debt ceiling and the blow for housebuilding and other rate-sensitive stocks after a shock inflation print of 8.7%.

The prospect of more interest rate hikes by the Bank of England today meant the yield on the two-year gilt remained above 4.5% compared with 4.18% earlier in the week.

FTSE 100-listed builders came under selling pressure, with Persimmon shares down 22p to 1197.5p and Taylor Wimpey off 1.9p to 115.5p. In contrast,

Rio Tinto rose 177.5p to 4935.5p after

Morgan Stanley upped its price target to 5800p.

The FTSE 250 fell 44.08 points to 18,796.67, with cyber security firm

Darktrace down 19.8p to 272.2p.