Dec 2, 2019

Ocado launches £500m bond to fund robotic warehouses

Ocado is to issue £500m of convertible bonds to help fund the robotic warehouses it is building to deliver groceries for its overseas partners. Over the past two years Ocado Solutions, the group's technology arm, has struck deals with international food groups such as Sweden's ICA Group, France's Groupe Casino, and Kroger of the US to develop automated warehouses and the associated software for online grocery orders. Goldman Sachs - which once employed Ocado co-founder Tim Steiner as a bond salesman - and JPMorgan Cazenove are acting as joint bookrunners. Typically, Ocado's clients pay for the shell of the building and the delivery vehicles, with Ocado itself financing the robotics and software. A series of deals struck with overseas supermarkets - most notably the agreement last year to roll out up to 20 automated warehouses for Kroger - and the part-disposal of the grocery business, have made Ocado more of a technology stock.

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