EG Group has cleared its immediate debt obligations with the proceeds of the sale of its UK forecourt business to founder Zuber Issa, it said on Wednesday.
The business sold its remaining UK forecourt business and certain standalone foodservice locations to Issa at the end of October.
EG will use the £263m in net proceeds to fully repay a bridging facility and “has now fully addressed its near-term debt maturities,” said the business. It will continue to pursue a strategy of deleveraging.
Founded by the Issa Brothers in 2001, EG Group had built a debt pile of around £7.6bn by the end of 2022. It is now understood to owe around £4bn.
As well as its UK forecourts, EG sold 19 of its convenience stores located in Kansas and Missouri in November for net proceeds of $21m, and in June agreed to sell 39 of its convenience stores located in Illinois, for net proceeds of $38m. The deal is expected to complete later this month.
This deleveraging activity contributed to Moody’s upgrading EG’s outlook from negative to stable.
Zuber Issa has now stepped down from his executive leadership role, leaving his brother Mohsin as the sole CEO. Zuber also sold his share in Asda earlier this year amid speculation of a rift between the brothers.
The announcement came as the group reported third-quarter results on Wednesday.
Volumes were up 3% in the three months to 30 September, with higher volumes in France and Italy partially offset by the US.
The group’s underlying EBITDA grew by 8% to $300m with gross profit up 2% due to volume growth and stable margins.
“EG Group expects to continue delivering its strong financial performance through its diversified and cash generative business model,” said Mohsin Issa, co-founder and CEO.
“EG Group has a differentiated customer proposition that is supported by well-known premium brand partnership and proprietary brand offerings. Now with a strengthened balance sheet, the Group has the resilient operations and scale to win in an industry where size is vital for success.”
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