Woolies seeks loan to fund purchase

Woolworths Australia has hired Citigroup to arrange a A$1.3 billion loan to fund its acquisition of Foodland.

Woolworths has agreed to buy Foodland with Metcash for as much as A$3.1 billion, and is expected to fund the acquisition with 50 per cent debt and 50 per cent equity, the International Financing Review said.

The A$1.3 billion loan is scheduled to be refinanced with bonds in September, the report said.

Woolworths is Australia's largest grocer.