EG discuss £500m Asda portfolio sale

The billionaire brothers behind EG Group and Asda are understood to be close to the sale of another chunk of the supermarket’s property portfolio in a bid to bring down its mounting debt pile.

Mohsin and Zuber Issa, backed by TDR Capital, are said to be in talks with an Australian finance house for a deal worth about £500m.

Macquarie Asset Management is close to buying the ground rent leases of about 50 Asda stores in Britain, with a provision included to allow Asda to re-assume ownership for a small amount at the end of the 50-year term, React News reported.

This would enable the supermarket chain to pay fairly low rent while allowing it to raise large amounts of equity.

The deal follows an earlier batch of store disposals to American investor Realty Income Corporation, which snapped up 25 stores earlier this year in a £650m sale-and-leaseback transaction earlier this year.

The brothers also sold 415 stores on America’s east coast in a $1.5bn sale-and-leaseback deal to bring down debts of its petrol and forecourt empire, EG Group.

The owners revealed in May they had agreed to sell the group’s UK and Ireland operations to Asda in a £2.3bn tie-up.