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EG Group raises $1.5bn through US sale and leaseback deal

The sites are on the US' East Coast

The Issa Brothers’ Blackburn-HQ’d EG Group has agreed a sale and leaseback deal of US sites worth around $1.5bn.

Under the deal, EG Group has disposed of 415 stores on the US East Coast under the Cumberland Farms, Fastrac, Tom Thumb and Sprint brands to Realty Income Corporation. It will continue to operate the stores under the leaseback agreement.

In a statement EG Group pointed to the “attractive terms” for the transaction, which it said represented around 15 per cent of its global real estate holdings.

The deal is expected to be completed in the second quarter of 2023. The group said it will use the net proceeds to pay down its debt, which stood at over £9bn when the company last filed accounts to Companies House in September 2022.

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, added: “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 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’s brands include Euro Garages, Cooplands Bakery and Leon chain of healthy fast food stores, and it operates over 6,600 sites globally.

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