Issa brothers close to striking ‘leaseback deal with Macquarie’
The expected £500 million transaction involving Asda’s assets will help reduce the retailer’s debt
The Issa brothers and the private equity firm TDR Capital bought Asda in a £6.8 billion deal in 2020. (REUTERS/Toby Melville/File Photo)
BLACKBURN’S billionaire Issa brothers are believed to be close to selling a part of Asda’s property to reduce the supermarket chain’s debt.
Macquarie Asset Management is on the verge of buying ground rent leases of about 50 Asda stores in the UK, React News reported.
The sale-and-leaseback deal, estimated to be in the region of £500 million, is expected to result in Asda paying a relatively low rent to the Australian global asset manager during the 50-year lease period.
Such a transaction allows an entity to sell a property and lease it back for a long term while being able to use the asset without owning it during the period.
Asda’s rival Morrisons has also struck sale-and-leaseback deals to bring down its debt level.
The Issa siblings – Mohsin and Zuber – backed by the private equity firm TDR Capital, bought Asda from the American giant Walmart for an enterprise value of £6.8 billion in 2020.
The buyout resulted in a debt pile which the brothers are trying to bring down.
Asda’s expected deal with Macquarie comes after the American investor Realty Income Corporation snapped up about 25 stores from the Leeds-based retailer in a £650 million sale-and-leaseback transaction earlier this year.
However, Asda and Macquarie have not commented on the latest development.
The Issas agreed to sell their EG Group’s UK and Ireland operations to Asda in a £2.3 billion tie-up.