Mohsin and Zuber Issa own over 6,600 gas stations and stores across the UK, Europe, the US and Australia. Photo: John Super
Billionaire owners of Asda and gas station giant EG Group are selling off many convenience stores in the US in an attempt to pay off billions of pounds of debt.
Mohsin and Zuber Issa sold 63 EG Group-owned stores in Kentucky and Tennessee, sold to American chain Casey's General Stores for an undisclosed amount.
The brothers are selling assets to reduce debts incurred as a result of the huge expansion of their retail empire.
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EG Group's debt was $9.67 billion (£7.6 billion) at the end of 2022, according to the company's financials.
Zuber Issa said: “For EG Group, this sale also represents another important step in pursuing our deleveraging strategy.”
On Tuesday, Moody's warned that Asda, which Issa bought for £6.8bn in 2021, was facing pressure amid fierce competition in the food sector.
The credit rating agency said the retailer faced risks associated with its recent £2.3bn purchase of EG Group's UK and Ireland businesses.
Earlier this year, the brothers sold the Asda division for £2.3bn to help pay off EG's debt.
But in doing so, he loaded Asda with £770m of high-interest loans sterling and relied on a £450m cash injection from shareholders.
Moody's valued Asda's current debt at £7.5bn.
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As interest rates rise, so does the cost of servicing large debt obligations, putting strong pressure on highly leveraged businesses.
However, Asda Chairman Lord Stuart Rose spoke in defending the acquisition by EG's supermarket export sites.
Earlier this year, he said: “Business will grow. Debt fades over time. And we believe that this is a completely stable financial position in the capital structure.
EG Group said in June that it expects its net debt to fall to $5.4 billion after Asda and other deals are completed later this year. 22 years ago.
The Issa brothers from Blackburn, who own over 6,600 filling stations and shops in the UK, Europe, US and Australia, set up the business in Bury, Greater Manchester 22 years ago.< /p>
Over the past decade, they have financed rapid growth with huge debts, taking advantage of low interest rates.
In addition to Asda, they also acquired the Leon fast food restaurant chain for £100m. in 2021.
Asda recently reported that its LFL sales, excluding fuel, rose nearly 10% to £5.4bn from April to June compared to the same period last year.< /p>
The company said sales across the Just Essentials price range were up 87% year on year as UK households slashed their spending due to the cost of living crisis.
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