Asda owners Mohsin and Zuber Issa have revealed that they are using the supermarket’s assets to help fund part of its acquisition of EG Group, as they look to expand their forecourt empire in the UK.
The entrepreneurial brothers, and their private equity backers at TDR Capital, will be paying over £450m from the proceeds of selling Asda’s assets to help fund the total £2.3 billion purchase.
The deal is set to make a retailing powerhouse, potentially generating around £30bn of sales from 581 supermarkets and 700 petrol forecourts.
It will also provide a vital cash infusion for EG Group ahead of a critical £7 billion refinancing in 2025.
The Issa Brothers acquired the grocery giant in 2020 and are now using the supermarket chain’s assets to slash the debts in their forecourts business.
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However, it has emerged that the £450m of equity the brothers are injecting to fund the deal will come entirely out of the £1.7bn they received from the sale of 27 Asda warehouses to investment giant Blackstone in 2021.
According to the Financial Times, that deal was mainly financed by loading up the grocer with £3.7bn of junk-rated debt, a sale of Asda’s assets, and an intercompany loan.
Despite the property sales, the grocery retailer will still own £9.6bn worth of real estate in the UK.
“The Issa brothers and TDR have not put much of their own money into Asda at any stage,” CreditSights analyst Amarveer Singh told The Times.
A spokeswoman for the retailer also commented: “Asda’s acquisition of EG’s UK&I business is about driving growth, providing value to customers and creating a stronger, more diversified business.
“It will enable Asda to bring its value-led offer to even more customers — in convenience retail and food service — as well as at the petrol pump.”
5 Comments. Leave new
Yet they have no interest in looking after their workers and settling the Equal Pay claim, where women in stores are still being paid upto £3 less than their male colleagues who do the same jobs in the warehouse. It works out that women in stores work for £0 from 6th November for the rest of the year for free.
They’re also killing the stores by massively cutting hours and reducing number of colleagues and underfunding basic requirements.
Why do you bring up women? Are men in stores also being paid more than the women?
I work for them the stores are shocking scruffy and not much on the shelves and no checkouts hardly and no staff shocking .worst its ever been since the brothers took over .
They do not do the same job as the warehouse roles . The warehouse jobs are much more physically intensive then the store roles. They have huge targets to meet in the warehouse. I worked for asda for 15 years. I started in store then moved to distribution. The jobs are not comparable.
Yes but I see how cages off stock come into our store from distribution centre heavy articles on top off lighter articles and stock loaded onto damaged cages is that why it’s uncompareable