Mohsin Issa updates on the EG disposals and trading

Debt laden petrol stations and retailer EG Group insists it has repaid large chunks of its debt and has sold the remaining UK forecourt business to Zuber Issa, brother of Mohsin Issa, who still runs the EG with interests across America and Europe.

The Blackburn headquartered business said the sale generated net proceeds of around £263m ($342m).

The brothers have opted to go their separate ways in some of the businesses and Mohsin has taken a step back from the active management of Asda, which they bought in a highly leveraged deal in 2021.

Rising interest rates have put a strain on the finances of the business so a deleveraging process has been underway. On November 8, 2024, the EG sold 19 convenience stores in Kansas and Missouri for $21m. Separately, in June 2024, the Group agreed to sell a further 39 stores located in Illinois for $38m.

In November 2024, the Group used proceeds from these disposals to fully repay a bridging facility. In addition, cash flow initiatives allowed full repayment of the Rolling Credit Facility in September 2024. Following these steps, the Group has now fully addressed its near-term debt maturities.

This deleveraging activity has resulted in credit agency Moody’s upgrading the outlook of the business from negative to stable.

In a trading update for the third quarter of 2024, representing the three months to September 30, 2024, Mohsin Issa, co-founder and CEO of EG Group, said: “The third quarter of 2024 saw another strong performance from EG Group. Underlying EBITDA rose by 8% with strong performances across both our Grocery & Merchandise and Foodservice segments. The performance of EG America was particularly pleasing, with earnings growth of 21%.

“EG Group expects to continue delivering its strong financial performance through its diversified and cash generative business model.  As a leading global independent convenience retailer, 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.”

Underlying EBITDA at a group level grew by 8% to $300m in the third quarter. Gross profit was up 2%, with strong performance across Grocery & Merchandise and Foodservice.