Ocado downgraded amid global push

THE loss-making grocer Ocado is raising £575m in fresh funding to expand its technology business, despite signs of inflation slowing the online retail revolution.

News of the cash call came as credit ratings agency Fitch hit the company with a downgrade and warned of mounting risks at its international business.

Ocado announced plans to sell shares to institutional and individual investors after markets closed yesterday and said it had secured a £300m loan from a consortium of banks.

The company gathered enough orders to cover the share sale within about half an hour, according to terms seen by Bloomberg. Ocado said members of its leadership team will buy new shares as part of the placing.

The cash injection will be used to support the growth of its Ocado Solutions business, which provides automated warehouse technology to retail partners.

Meanwhile, Fitch warned investors of an “increased execution risk” within Ocado’s international segment, as operations ramp up more slowly than expected. It downgraded Ocado’s rating from “stable” to “negative”.

Shares were flat at 831.68p yesterday.