Issa brothers complete £3.2 billion refinancing deal to move Asda’s debt pile onto 2030
The supermarket giant has refinanced its huge debt pile into next decade.
Following ‘strong demand’ from investors, Asda has managed to shift a large amount of its debt after a series of refinancing deals.
Today it was announced that the supermarket giant, owned by Blackburn's billionaire Issa brothers, completed refinancing deals on around £3.2 billion worth of debt.
The maturities on these debts were pushed back past 2030 with the retailer paying higher interest rates on the new bonds.
After the £6.8 billion takeover from the Issa brothers and private equity firm TDR Capital in 2021, Asda was left with a net debt of £3.8 billion at the end of last year.
As part of the refinancing, the UK’s third largest grocery chain said it also used £300 million of cash from its balance sheet to reduce its gross debt.
Michael Gleeson, Asda’s chief financial officer, said: “We saw strong demand from investors after taking a thoughtful and prudent approach to refinancing our near-term debt well ahead of maturities, to further strengthen our balance sheet.
“The refinancing also reflects the wider strength of Asda as a diversified retail group with a strong grocery business at its core.
“It is also supported by a fantastic non-food offering in George and following recent investments, a major presence in the high-growth convenience and food-service markets.”
In a report revealed by Asda last week, it explained how the supermarket had seen an increase in both food and clothing sales by a quarter in 2023.
Compared with 2022, its underlying earnings, before additional costs like tax and interest, rose by 24% to £1.1 billion over 2023.
Supermarket sales, excluding fuel, grew 5.4% on a like-for-like basis, which excludes the impact of new stores opening during the year.
The refinancing news comes amid reports that Zuber Issa close to completing a deal with TDR Capital to sell them his roughly 22% stake in Asda.
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