Shares in Ocado surged this morning(19 November)as the UK online retailer said it had extended its debt facility and would raise GBP35.8m(US$57m)in a placing to fund expansion of the business.

In an announcement today,the retailer said its existing lenders Barclays,HSBC and Lloyds had agreed to extend the maturity of a GBP100m capital expenditure facility by 18 months to July 2015.The group also launched a GBP35.8m share placing through the sale of 55.8m new shares.Ocado's stock was up 26.5%at 76.60 pence at 12:13 GMT.

The retailer said the proceeds of the placing will"strengthen the company's balance sheet and support the continued growth of Ocado".

It also provided a trading update for the 14 weeks to 11 November and said it achieved year-on-year gross sales growth of 11%.

Ocado,which is struggling against better service propositions from its supermarket rivals,has struggled to make a profit since its flotation in July 2010.In June the retailer reported flat first-half profits and in September reported a slowdown in sales growth in the third quarter.