Shares up over 18% (Il Sole 24 Ore Radiocor) - London, 05 Sep - Shares in ASOS were sharply higher after the UK fast fashion retailer announced a partial refinancing of its debt and the disposal of two brands.

At 1046 GMT, ASOS was up 18.34% at 435 pence.

ASOS launched a refinancing that involves offering about 250 million pounds of convertible bonds due 2028 and the partial repurchase of the outstanding 500 million pounds of 0.75% convertible bonds due 2026 and issued by Cornwall.

It also announced an amendment and extension of its existing facilities agreement with Bantry Bay Capital to May 2027 with an option for a 12-month extension.

ASOS added that it has entered into a binding agreement with Heartland to form a joint venture which will purchase the Topshop and Topman brands. Heartland will indirectly hold a 75% stake in the joint venture for 135 million pounds.

The remaining 25% stake will be held by current Topshop and Topman owner ASOS Holdings Limited, in which Nordstrom will continue to hold a minority interest.

ASOS also expects full-year adjusted EBITDA to be at the top end of consensus estimates, sales to be slightly below guidance, while all other guidance remains unchanged.

The retailer noted that it has achieved "good progress" on its Back to Fashion strategy, "hitting targets on Test and React, adding new and exciting third party brands and progress in lowering returns." The broker Panmure Liberum said that ASOS' sales are expected to fall in fiscal 2024 but cost savings are seen boosting adjusted EBITDA above consensus expectations.

It added that the debt refinancing "helps alleviate some of the short-term concerns around the company's debt position.".

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(RADIOCOR) 05-09-24 12:52:56 (0294) 5 NNNN