The Issa brothers’ EG Group has signed a £440m deal to buy 285 petrol stations in Germany amidst fears over its debt mountain.
The acquisition from OMV is the second deal signed since Blackburn-based Zuber and Mohsin Issa bought Asda for £6.8bn in October, and extends their business’ 6,000- strong network of petrol stations and convenience stores.
It follows a Moody’s decision to downgrade EG Group because of the way the company reports its £7billon debt pile, as well as governance issues which prompted its auditor Deloitte to resign.
Petrolheads: Mohsin and Zuber Issa have extended their business’ 6,000- strong network of petrol stations and convenience stores.
The purchase of Asda, which is being investigated by the UK competition watchdog, will be Britain’s largest leveraged buyout in more than a decade.
The Issas sold new preference shares – considered halfway between debt and traditional equity – in the firm to two Canadian pension funds and Abu Dhabi’s sovereign wealth, in a deal that valued the firm at around £15billion.
The deal was seen as a way of providing cash to help pay for Asda. The company said the acquisition was funded from existing cash reserves and loans, and would be ‘leverage neutral’.
EG’s like-for-like sales fell 23 per cent to £11.8billion in the nine months to September, but earnings rose 17 per cent to £562m thanks to resilient performance in its food business.
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