Blackburn's billionaire Issa brothers are to sell all 218 of the KFC franchises owned by their EG Group in order to repay their debts.

Today (December 6), EG Group announced that it has entered into a definitive agreement to sell all its 218 KFC franchise restaurants in the UK and Ireland to Yum! Brands’ KFC Division.

The transaction agreed by EG Group – the largest KFC franchisee in the UK and Ireland – is an additional step in the company’s deleveraging strategy and continued progress towards putting in place a sustainable capital structure.

The sale, on which Freeths solicitors advised upon, is expected to complete in the first half of 2024, with proceeds to be used to repay debt.

READ MORE: Blackburn's Issa Brothers owned EG Group sells majority of UK business

EG Group continues to operate in the USA, Australia, Germany, France, Italy, the Netherlands, Luxembourg, Belgium and the UK, including its wholly-owned bakery business, Cooplands, as well as franchise businesses with the Starbucks, Subway, Greggs, Sbarro, Chaiiwala and Cinnabon brands.

Zuber Issa and Mohsin Issa, co-founders and co-CEOs of EG Group, said: “We are proud to have been a strategic partner of KFC in the UK and Ireland, playing an important role in helping the brand expand its footprint.

"Now is the right time to hand the baton to the KFC leadership team to continue to grow the brand in the UK and Ireland.

"This is the latest transaction in our significant deleveraging this year to put in place a sustainable capital structure for the group.

"We would like to thank all the colleagues who have helped deliver such exceptional brand standards and customer service over recent years, including during the Covid-19 period.

“We continue to make good progress against our key strategic priorities – delivering a world-class grocery and merchandise, foodservice and fuel proposition across nine markets globally.”

Lancashire Telegraph: KFCKFC (Image: Archive)

Last week, the Lancashire Telegraph reported that the EG Group said the sale of its UK and Ireland petrol filling station business to Asda, which they also own, has delivered 'significant progress' reducing its debt mountain.

READ MORE: Issa brothers' EG group reduces debts 'significantly'

The firm offloaded the subsidiary to the supermarket giant - which the Issas also own - in October for £1.98 billion, making a big cut in its borrowings.

But its results in the third quarter of 2023, representing the three months to September 30, also saw a drop in profits and revenues.

The group said the proceeds of the sale – together with the £34million sale and leaseback of part of its US portfolio – have been used to repay almost £3.2bn of the group’s debt and significantly reduce net leverage.