Asos Shares Plummet Amid Loan Covenant Renegotiation Talks
Troubled Fast-Fashion Retailer Faces Uncertain Future
London, UK - October 17, 2022 - Shares of British online fashion retailer ASOS (ASOSL) took a sharp dive on Monday after the company confirmed it was in discussions with lenders over changing the terms of a £350 million ($394 million) borrowing facility.
The news sent ASOS shares down by over 10% in early trading, as investors expressed concerns about the company's financial health. ASOS has been struggling in recent months due to a number of factors, including rising costs, supply chain disruptions, and a slowdown in consumer spending.
In a statement, ASOS said that it was "in discussions with our lenders to amend the terms of our existing borrowing facility" and that it "will provide an update in due course." The company did not provide any further details about the proposed changes to the loan agreement.
The loan covenant renegotiation talks come at a time when ASOS is facing increasing competition from both traditional brick-and-mortar retailers and online players such as Boohoo and Zalando.
Analysts say that the company needs to make significant changes to its business model in order to regain its competitive edge and survive in the long term.
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