Having surpassed the expectations pertaining to fiscal first-quarter same-store sales as well as outperforming its closest rival Tesco, UK's supermarket chain J Sainsbury Wednesday announced it plans to raise £445 million to expedite its store expansions.

The surprise capital-raising by the 140-year-old British grocery store - running more than 500 supermarkets and nearly 300 convenience stores - will come by the way of
255 million pounds in a placing of new shares and 190 million pounds in an offering of convertible bonds due 2014.

According to the J Sainsbury CEO, Justin King, the capital raising will provide the company with the "financial flexibility to significantly grow the business further and faster."

King said that the company plans to grow space by 15 percent, indicating a 2.5 million square feet expansion in selling space, by March 2011. The company had earlier planned a 10 percent growth in selling space.

Though the proposed expansion drive will, to some extent, pressure earnings in the current and next financial year because of extra interest and pre-opening costs, it is expected to bring about an increase in sales growth in 2010-11.

Among its other plans, Sainsbury intends selling more non-food products, and would be acquiring six more supermarkets and three convenience stores from the Co- operative, over and above the 24 stores it bought from them in March!