J Sainsbury Agrees GBP 3.5 Bln Financing For Asda Merger

J Sainsbury plc (JSAIY.PK, SBRY.L) said that it has agreed a financing package of 3.5 billion pounds in relation to the proposed combination with Asda Stores Limited, working with its existing banks and new institutions. The level of commitments received significantly exceeded its requirements, resulting in scaled back allocations across all tranches.

The existing Sainsbury's RCF would increase from 1.45 billion pounds to 2.0 billion pounds at transaction close, providing further financial flexibility to the combined Group.

J Sainsbury said that it is on track to achieve 200 million pounds of cost savings this year.

On April 30, Walmart said it will sell its U.K. business, Asda, to Sainsbury in a deal worth 7.30 billion pounds.

Mike Coupe, Group Chief Executive of J Sainsbury plc, said today, " .. We have also confirmed our plans to increase our colleague hourly rate of pay to an industry-leading £9.20 an hour from September and will introduce one simple, fair and consistent contract for all Sainsbury's store colleagues. Both of these significant changes means we are well set up for the future."

J Sainsbury said it expects to open around 90 Argos stores in Sainsbury's supermarkets in the 2018/19 financial year, which will take the total to around 280. It has 174 collection points in its supermarkets, including 37 in convenience stores, where customers can collect Argos, DPD, eBay and Tu clothing. (dpa)