Asda’s Issa brothers launch £8.6bn property review as it seeks to cut debt

No comments

Asda owners the Issa brothers have launched a review of its £8.6bn property estate as they seek to bring down debt levels.

Owners Mohsin and Zuber Issa, who control Asda with backing from TDR Capital, are pondering the sale and leaseback of Asda supermarkets, The Telegraph reported.

Property experts are reported to have been brought in to “assess the prospects” for Asda’s portfolio, although the brothers are expected to keep a “sizeable underpin” of freehold properties even some locations sites are sold and leased back.

A sale and leaseback of Asda properties could help to reduce interest payments and lower debt but it is also at risk of paying higher rent.

An Asda property deal would follow a recent $1.5bn sale and leaseback deal in the US by the Issa’s EG Group forecourts retail business.

Zuber Issa said then: “[The] announcement demonstrates the progress we continue to make to put in place a robust capital structure for the medium term that will underpin our long-term strategy and represents an important first step in this process.”