Wednesday June 17, 01:01 PM
Supermarket Sainsbury plans to raise £445 mln
LONDON (AFP) - British supermarket chain Sainsbury (LSE: SBRY.L - news) said on Wednesday it planned to raise about 445 million pounds (527 million euros, 732 million dollars) by placing shares and issuing bonds to fund expansion.
It immediately raised more than half the amount, about 242 million pounds after selling new shares each priced at 310 pence.
Earlier in the day, the group also said its sales had grown by 7.8 percent in the 12 weeks to June 13, compared with the same period of last year, despite a deep recession in Britain.
"The fund raising announced today will provide us with the financial flexibility to take advantage of current opportunities to grow our business further and faster," chief executive Justin King said in a statement.
He added: "We have had a strong start to the new financial year. While we expect the economic environment to remain challenging during 2009, our wide customer base and focus on great products at fair prices means we are well positioned to continue our progress."
The company said the funds would enable it to increase its planned gross space growth over the next two years from 10 percent to 15 percent.
Sainsbury added it would be buying nine more stores from the Co-Operative Group in addition to the 24 already purchased.
The group has enjoyed rising sales of its cheaper own-label products in recent months as cash-strapped customers have sought to save money amid a deepening recession.
In early afternoon trade, Sainsbury shares sank 6.63 percent to 309.75 pence on London's FTSE 100 index of leading companies, which was down 1.02 percent.
The company, which marked its 140th anniversary last month, is the third-biggest supermarket player in Britain behind number one Tesco (LSE: TSCO.L - news) and Asda (NYSE: WMT - news) , which is owned by US retail giant Wal-Mart.
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