• Monday, May 20, 2024

Business

Asda’s finance chief dismisses sale rumours

Customers arrive and leave from an Asda supremarket store in Ashford, south east England. (Photo by BEN STANSALL/AFP via Getty Images)

Pramod ThomasBy: Pramod Thomas

ASDA’s finance chief, Michael Gleeson, has rejected talks about selling the supermarket, despite changes in ownership, The Times reported.

With Zuber Issa, one of Asda’s current owners, preparing to sell his sizable 22.5 per cent stake to private equity firm TDR Capital the grocery giant finds itself in the midst of an ownership shake-up.

The Issa brothers, Mohsin and Zuber, and TDR Capital bought Asda from Walmart in 2021 for £6.8 billion.

According to Gleeson, Issa brothers, along with TDR Capital, have a track record of long-term investment rather than quick sales.

“They don’t tend to be in and out of companies — they hold their positions in companies for significant periods of time. So ‘no’ is the answer to that,” he was quoted as saying.

It was reported that Mohsin Issa is planning to step back from his operational duties at the supermarket chain, marking a significant transition for the company.

This strategic move signals a broader “reset” within Asda’s leadership structure, paving the way for the appointment of a new chief executive.

With this shift in leadership, Asda is actively seeking a new CEO to steer the company through its next phase of growth and development.

Gleeson revealed that headhunters have been enlisted to assist in the search, emphasising the importance of finding the right person for the job.

Meanwhile, the Issa brothers are also making changes within their own empire.

Zuber intends to step down as co-chief executive of EG Group, the petrol forecourt empire he co-founded with his brother. This decision will leave Mohsin in sole charge of the company, as the brothers seek to streamline their business interests.

Rumors of a rift between the brothers have circulated, but Mohsin denied any such discord, insisting that their relationship remains strong.

“We get on exceptionally well,” he said in an interview with the BBC, “and still talk to each other probably two or three times a day.”

Asda has been actively reducing its debt through sale and leaseback transactions and has reported positive financial results for the latest fiscal year. Total net debt was reduced to £3.8bn, with free cash flow increasing by 31 per cent to £776 million.

Adjusted earnings saw a significant rise of 24 per cent to £1.08bn, reflecting the company’s resilience amidst challenging market conditions.

Meanwhile the Financial Times reported that the supermarket chain plans to raise more than £2.6bn to refinance its debt. It includes marketing a £900 million term loan to investors and plans to raise a further £1.75bn of debt. The new loan will mature in 2031.

A bond deal in this regard is expected to be announced in the coming days. Asda, however, declined to comment on the plans.

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