Asda owners review £8.6 billion property estate

Asda’s billionaire Issa brothers have reportedly begun a review of the grocer's £8.6 billion property estate as the company looks to reduce its considerable debt.

According to The Telegraph, the owners want to retain an 'underpin' of freehold properties, while selling many of its sites to investors and leasing them back. The report notes that property experts have been called in to assess the prospects of its estate sale, two years after the Issa brothers acquired Asda in a £6.8 billion deal from Walmart.

The acquisition was fuelled by debt, with the TDR Capital-backed EG Group only injecting £800 million in equity.

That debt, along with the cost of living crisis and rising interest rates have increased pressure on the company to reduce its debt.

The report adds that discussions to sell-off parts of Asda are 'well advanced', with EG Group looking to raise around $2.2 billion in addition to the sale of $1.5 billion worth of US retail property announced last week.

At the time, Zuber Issa, CBE co-founder and co-chief executive of EG Group, commented: “Today’s announcement demonstrates the progress we continue to make to put in place a robust capital structure for the medium term that will underpin our long-term strategy and represents an important first step in this process.”

EG Group is reportedly also considering a merger of Asda with its UK petrol station business, but there are concerns that this could attract the attention of competition regulators.

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