Asda is staring down at what may be a potentially complex financial restructuring ahead of steep payment owed to its former owner.
The supermarket may be forced to refinance its multi-billion pound debt pile ahead of a £900m payment owed to Walmart, which is due within three years.
First reported in The Telegraph, the bill comprises £500m for Walmart’s remaining stake in Asda and £400m in interest, which could destabilise the grocer’s financial framework, according to credit rating agency Fitch.
Despite having already refinanced £3.2bn of its borrowings in May, which deferred repayments into the next decade, Asda’s current debt pile sits at approximately £6bn.
An Asda spokesperson told The Telegraph: “We acknowledge Fitch’s view; however, it should be noted this reflects their opinion and is not a statement of fact.
“Asda continues to take a disciplined and proactive approach to managing its debt obligations. Earlier this year, we successfully refinanced more than £3.2bn, a move that demonstrated robust investor confidence in the business and pushed the majority of our maturities well into the next decade.
“Asda is a highly cash-generative business with a strong and stable capital structure, enabling us to invest in our colleagues and new customer propositions while simultaneously reducing leverage, which has decreased from x4.1 to x3.0 over the last 18 months.
“Asda’s net debt at the end of Q3 2024 was £3.8bn – a £100m reduction on the previous quarter – and the business is committed to deleveraging.”
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