The billionaire brothers who own the Asda supermarket chain borrowed millions of pounds from their petrol forecourt company to repay the debt taken on to buy two private jets, it has emerged.
Corporate filings revealed that Mohsin and Zuber Issa, who bought Asda in 2020, used their EG Group, which runs thousands of petrol stations in the UK and overseas, to lend $7m (£5.6m) to two private jet companies they owned in 2022.
The filings, seen by the Financial Times, show more than $5m (£4m) handed to one Issa-owned company, which controls a Bombardier Global 6000 plane, while the remaining $2m (£1.6m) went to another one of their companies, which owns a smaller Bombardier plane. Both companies are registered in the Isle of Man.
Last year, it was reported that EG Group had issued a €39m (£33m) unsecured loan to the companies to buy back the jets in 2018.
The two brothers’ debt-laden takeover of Asda has come under scrutiny in recent months, with politicians asking questions about the structure of their ownership.
The brothers bought Asda in 2020, alongside the private equity group TDR capital, in a deal worth £6.8bn.
However, the brothers put in only £100m of their own cash, alongside £100m from TDR Capital. The remainder was funded by the largest sterling corporate bond sale on record, according to Bloomberg, as well as a loan from the parent company of EG Group.
In September, Darren Jones, the then chair of parliament’s business and trade select committee, asked for details of the retailer’s corporate structure, capital investment and profit margins on petrol.
He also requested more details of loans issued by the EG Group for the purchase of the jets for the Issa brothers.
In 2018, EG Group handed the private jet companies €39m in unsecured, interest-free loans to buy the jets. The jet companies also borrowed money from the Bank of America, which has security over the two planes.
The FT reported that the $7m of new loans made in 2022 would be enough to cover all but $1m of the amount EG reported it received in interest repayments from the two companies that year. However, a source told the paper the money was actually used to pay interest and principal – the initial amount borrowed in a loan – on external debt owed to third parties.
EG Group said: “As previously disclosed to the Financial Times in 2022, loans to the [Isle of Man] companies are fully disclosed in the EG Group accounts and continue to be so.
“These loans have been provided at rates comparable to the average commercial rate of interest. The interest has been identified and recognised within EG Group’s finance income.”
A source said the loans were due to be repaid in full by November.
Earlier this month, Mohsin Issa confirmed that he was in a relationship with Victoria Price, a former tax partner at EY. She left shortly after the firm resigned as auditor of Asda in July last year.
The Telegraph also recently reported that Zuber Issa, who owns 22.5% of the supermarket, was looking to sell his shares and instead focus on the petrol forecourt business.
