EG Group, the convenience retail giant owned by entrepreneurs the Issa brothers, has said the sale of UK operations to Asda has allowed it to pay down US$4 billion of debt.
The group sold its UK and Ireland business to Asda, another company owned by the brothers, for US$2.5 billion in October.
The sale, combined with another deal in the US, has helped it to repay US$4 billion of its debt and reduce its net leverage, EG Group said in a statement on Wednesday.
The group’s co-chief executives, Zuber Issa and Mohsin Issa, said they had made significant progress in their deleveraging strategy and refinancing activities, and that they remained focused on driving earnings growth in the near term.
However, the group also reported a drop in profits and sales for the third quarter of 2023, due to lower fuel volumes and a competitive environment.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 18% to US$345 million, while sales fell 6% to US$7.6 billion, according to its latest results statement.
The group’s grocery and merchandise profit increased slightly by 2.8% to US$376 million, due to higher sales and a better product mix in the UK and Ireland.
Its food service business grew gross profit by 24% in the quarter to US$221 million, was described by the brothers as a “significant growth opportunity globally”.
The brothers and co-chiefs of the group said they continued to deliver on their key strategic priorities, including growing their food service, and grocery and merchandise businesses.