AO World has announced it intends to raise gross proceeds of £40m through a proposed placing and primary bid offer as the company’s shares dropped 15% on Monday (4 July 2022) amid concerns of its financial situation.
AO World intends to conduct a placing of new ordinary shares of 0.25 pence each in the capital of the company at a price of 43 pence per share.
In addition to the placing, there will be a separate offer of new ordinary shares at the placing price via the PrimaryBid platform. AO World said that a separate announcement will be made shortly regarding the PrimaryBid Offer and its terms.
The placing is being conducted by way of an accelerated bookbuild available to qualifying new and existing investors, and will be launched immediately.
The announcement comes as AO World recently unveiled its decision to close its German operations to focus on its online position in the UK electricals market.
Overall, the company’s market in the UK has grown to £23.4bn as it extends into new categories.
AO World said it continues to simplify and refocus its UK operations, exiting some lines of business and driving operational efficiencies and overhead reduction which is estimated to generate £25m of benefits by FY25.
John Roberts, AO World CEO, said: “In addition to being a sensible piece of financial house-keeping given the short-term macroeconomic uncertainty, this Capital Raise will give us the necessary foundation from which to go after the significant long-term growth opportunities that we see for AO in the UK.
“It will also allow us to deliver on the new financial targets that we are setting today. Our core major domestic appliance category is proving to be resilient over time, given the natural replacement cycle of white goods and their non-discretionary nature. In addition, expanding into newer categories remains a key priority and a major opportunity for us.”