BLACKBURN'S billionaire Issa Brothers have agreed to take on £3.5 billion of debt financing in order to complete their takeover of supermarket chain Asda.

The EG Group owners have already agreed to a £750 million deal to buy Asda's forecourt business and have said that, alongside partners TDR Capital, they intend to sell and then lease back some of the petrol stations and distribution sites once their takeover is complete.

The £3.5 billion figure is made up of a loan facility worth £740 million and £2.75 billion in loan notes to help the brothers finance the move.

In a joint statement Mohsin and Zuber Issa said: “We are putting in place a robust capital structure to support that growth strategy, and we are confident that external investors will share our belief in Asda’s strong fundamentals and exciting future prospects.

“Looking ahead, and subject to the required regulatory approvals, we look forward to working with our Asda colleagues to build an even stronger, more differentiated retailer, including through the investment of more than £1 billion in the next three years to further strengthen the business and its supply chain.

“We are also excited about the proposed integration of the Asda forecourts into EG’s established UK operations, which we believe would underpin the future growth of the combined network.”

Lancashire Telegraph:

The Issa Brothers hope to complete their takeover of Asda soon 

EG Group's takeover of Asda has been one of the biggest and most significant deals in the Blackburn-based company's history, with the plan to sell off and lease back some of Asda's assets had already been trailed in December.

This proved controversial, with the GMB union describing the proposal as "asset stripping" and warned that pay and conditions could be effected as a result.

However, EG Group hopes that the takeover will help drive the expansion of more Asda stores at existing EG petrol stations.

Asda chief executive Roger Burnley said: “Whilst the transaction remains subject to Competition and Markets Authority approval, we will work closely with our new owners on how these Asda sites would operate as part of the EG Group under the Asda brand and ensure they continue to be a price leader in the fuel sector.

“We know that our customers are enduring a challenging time with the latest lockdown and we continue to serve them the best we can through our stores and growing online delivery slots.”

EG Group expects the deal to be closed by the spring of this year.