The billionaire Issa brothers have sold scores of convenience stores in the US in the latest step on their bid to bring down debts.
The pair’s retail and petrol forecourt conglomerate, EG Group, today said it had disposed of 63 sites in Kentucky and Tennessee in a deal with US-listed Casey’s General Stores. The terms of the sale were not disclosed.
Zuber Issa, co-Founder and co-CEO of EG Group, said: “EG Group is pleased to have found a new home for some of our Certified Oil and Minit Mart portfolio.
“This divestment will enable both parties to execute their strategic plans, respectively. For EG Group, this divestment also represents another important step in executing our deleveraging strategy.”
It follows an earlier deal in March which saw EG Group sell 415 store assets in the US to property company Realty Income, in a $1.5 billion agreement which will see it lease the assets back for a $103 million annual rental fee.
EG Group said the move, which represents a sale of around 15% of its property portfolio, was part of its “commitment to reduce total net leverage through debt reduction and free cash flow generation.”
The company had racked up more than $9 billion of debt by the end of last year. The majority is made up of loans with interest pegged to LIBOR, EURIBOR and SONIA, indices representing the rate at which banks lend to each other. These rates have as much as quadrupled in recent months, leading to hundreds of millions in increased debt interest.
In May, the pair marked another milestone on their quest to slash their business empire’s heavy debt burden as they finalised plans to merge the UK operations of petrol forecourt business EG Group with Asda in a £2.3 billion deal.
EG said the deal with Asda was expected to reduce total net debt from $9,801m in March 2023 to $5.4 billion post-merger.
Chair Stuart Rose told reporters that the primary purpose of the deal was to expand Asda’s operations but “if as a consequence you’ve also got the opportunity to deleverage then what’s the problem with that?”
