Issa brothers complete £3.2 billion refinancing deal to move Asda’s debt pile onto 2030
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Following ‘strong demand’ from investors, Asda has managed to shift a large amount of its debt after a series of refinancing deals.
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Hide AdToday 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.
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Hide AdAfter 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.
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Hide Ad“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.
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Hide AdCompared 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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