Wesfarmers Plans New Debt Facility to Fund Homebase Deal

   By David Winning 
 

SYDNEY--Coal-to-supermarkets conglomerate Wesfarmers Ltd. (WES.AU) said Monday it would fund the purchase of the Homebase home-improvement chain in the U.K. with new loans denominated in British pounds, a move that could prompt changes to the outlook accompanying its credit ratings.

Wesfarmers has agreed to a deal worth 340 million British pounds (A$705 million) to buy Homebase from U.K.-listed Home Retail PLC (HOME.LN). The move marks a major push into overseas markets, with management planning to rebrand Homebase as Bunnings to bring it into line with its Australian DIY business.

In a statement, Wesfarmers said it had updated Standard & Poor's and Moody's Investors Service about the transaction and its plans to use debt denominated in British pounds.

"Whilst no change is expected to the group's existing credit ratings (A- and A3 level respectively), the anticipated short-term impact on credit metrics may result in a change to the group's outlook," Wesfarmers said.

Wesfarmers hopes to complete the deal by the end of March. It requires approval from Home Retail shareholders and its banking syndicate.

-Write to David Winning at [e-mail]

(END) Dow Jones Newswires

January 17, 2016 18:00 ET (23:00 GMT)

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