Zuber Issa exits Asda Ending Partnership, Quits as EG Group Co-CEO

Jun 8, 2024 | News | 0 comments

Zuber Issa has exited Asda after selling his 22.5% stake in the supermarket to existing owners private equity firm TDR Capital, the company said today, in signs the billionaire Issa brothers’ are separating a significant chunk of their close business interests.

The deal brings the ownership of Asda to 67.5% by TDR Capital, 22.5% by Mohsin Issa, and 10% by Walmart. The transaction is set to complete in Q3 2024. Asda did not disclose the terms of the sale.

Zuber Issa will also step down as Co-CEO of EG Group after reaching an agreement to buy its remaining UK forecourt business and standalone foodservice locations for £228 million. EG Group said it will use the proceeds from the divestment to repay debt and strengthen its balance sheet. Zuber will retain his existing shareholding in EG Group while his brother Mohsin will become sole CEO.

The two deals, announced simultaneously, mark the latest step in the splitting of assets held jointly between billionaire brothers Mohsin and Zuber Issa, who over the past two decades have built a multinational retail and petrol forecourt business from scratch via a series of debt-fueled acquisitions. Asda CFO Michael Gleeson had previously said the Issas are committed to running the supermarket ‘for the long haul’ and in an interview with the BBC Mohsin Issa has denied any rift with his brother.

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A surge in interest rates over the past two years has put strain on the pair’s business empire, who undertook a major debt reorganisation in a bid to deleverage. EG Group said it has now refinanced all of its debt due to have matured in 2025 “against a backdrop of a very challenging leveraged finance and high-yield corporate bond market.”

Last month supermarket Asda, which took on significant debt after acquiring much of EG’s UK forecourt business, said it had refinanced £3.2 billion in loans, including the biggest Sterling high-yield bond this year and the second-largest sterling bond in the European leveraged finance market – only behind Asda’s original £2.25 billion Sterling bond tranche in 2021.

 

Source: Yahoo Finance

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