Asda has revealed it faces an additional £30m in interest with £500m due in February to pay down the debt used to fund the Issa brothers £6.8bn acquisition of the grocer.
The status of the retailer’s debt pile was revealed as Asda execs including Mohsin Issa and finance director Michael Gleeson were questioned by MPs yesterday.
Addressing MPs on the business and trade select committee , Issa said that, despite the sudden rocket in the cost of borrowing in the last 18 months, he was confident that Asda remained financially stable.
“We can give you the confidence that it is run properly,” said Issa.
“What I would say is that the debt leverage at the start of the year was at 4.2 times, that has gone down to 3.8 times and that trajectory is to go down even further by the end of this year.
“At the same time, we are investing in colleague pay, customer pricing and loyalty. The business is highly cash generative.”
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In response to MPs queries about a potential gap of £1.7bn in their reported operating costs, Issa maintained that there was not a gap, and the sum was part of an operating cost.
Despite the £500m debt payment due in February, finance boss Gleeson revealed that the remainder of Asda’s debt is fixed until February 2026.
Other questions Issa faced included an inquiry into the supermarket’s complex structure, which he said was “not unusual for a large corporation like Asda”.
The latest round of questioning follows in the wake of the Asda co-owner being accused of contempt of parliament, after claims he provided “misleading” information to the committee earlier this year.
3 Comments. Leave new
Each level has own obstacles, how i regret to have commitments. I chose carefree one. But despite i listen to my own advice, etill.. unfortunates just happen. I calculated if without the commitments, how would i be today. Much better . End of the day, facts wont be changed how i got better and unfortunately, when got better then came morr commitments, obstacles… whe one is eingle, so much ewsier…but despite it feels li,r i am ” single “, facts wont change i have commitments yet the level of obstacle become soulish techy unreasonable. Oh well..
Can you explain your comment please? I am afraid I don’t understand the point you are making.
Why would anyone believe a single word that the Issa brothers say? They are obviously running Asda into the ground. They are obviously not paying tax on money in Jersey. Just hope the select committee doesn’t let this go.