Retailer ASOS shores up finances as coronavirus hits sales

A model walks on an in-house catwalk at the ASOS headquarters in London

LONDON (Reuters) - British online fashion retailer ASOS Plc said on Tuesday it was raising equity and extending debt facilities to shore up its finances in case of a prolonged business downturn from the coronavirus pandemic.

The group, which sells fashion aimed at 20-somethings, has kept going during the national lockdown in line with UK government guidance for online retailers.

Still, sales have plummeted 20-25% in the last three weeks.

To help weather the disruption it is placing new shares representing up to 18.8% of its existing equity, and extending its revolving credit facility by 60-80 million pounds ($74-$99 million). Its existing facility was 350 million pounds.

The group has also begun the process to confirm its eligibility for, and access to, the Bank of England's Covid Corporate Financing Facility.

"The COVID crisis is clearly going to continue to be tough for everyone and the short-term outlook remains highly uncertain, but the measures we have taken ensure we are able to be clearly focussed on making sure that ASOS emerges as a stronger and better business," said Chief Executive Nick Beighton.

ASOS shares closed Tuesday up 34% at 1,400 pence, paring losses for 2020 to 54%. At Monday's close its market capitalisation was 1.3 billion pounds.

The retailer announced results for its first half to Feb. 29 on Tuesday, a day ahead of schedule.

Revenue rose 21% to 1.597 billion pounds and pretax profit increased to 30.1 million pounds from 4.0 million pounds a year earlier.

(Reporting by James Davey; editing by Stephen Addison, Jane Merriman and Richard Chang)