Euro Garages founders Mohsin and Zuber Issa have agreed a $1.5bn sale and leaseback deal for their retail and petrol station empire, in the US.
The billionaire brothers started out with a single petrol station, in Bury, in 2001 and they are now worth a combined £4.73bn, according to the latest Sunday Times Rich List. However, as of September 2022, EG Group's net debt stood at £9bn.
EG Group has now announced the disposal of a portfolio of its sites on the east coast of the US to real estate investment trust Realty Income Corporation - with the deal expected to be completed in the second quarter of 2023. The portfolio, which EG America will continue to operate and trade, comprises 415 store assets under the Cumberland Farms, Fastrac, Tom Thumb and Sprint banners, Business Live reports.
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In a statement EG Group, which is owned by the Issa brothers and backed by TDR Capital, received a "high degree of interest from multiple blue-chip investors and attractive terms" for the transaction. The group added it will use the net proceeds to repay debt.
The assets represent around 15pc of the group’s total freehold property in 10 markets. Following completion, EG will pay an initial rent of $103m per annum with respect to the assets.
Further information is expected to be provided to investors in EG Group’s Q4 and full-year trading update call on Thursday (March 9). The group added that the deal is "in line with management’s commitment to reduce total net leverage through debt reduction and free cash flow generation"
Zuber Issa, co-founder and co-CEO of EG Group, said: "Today’s announcement demonstrates the progress we continue to make to put in place a robust capital structure for the medium term that will underpin our long-term strategy and represents an important first step in this process."
EG was advised by Eastdil Secured, the global real estate investment bank, alongside Barclays, Latham & Watkins, Skadden, Arps, Slate and Meagher & Flom, Rothschild & Co, and EY. The deal comes after reports emerged in January that the Issa brothers were looking to sell part of their US petrol station empire.
EG Group is jointly owned by the Issa brothers and TDR Capital, the private equity firm they partnered with to acquire Asda in 2021. The group, whose brands include Euro Garages, Coopland and Leon, has over 6,600 sites across the world.
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