The co-founders of EG Group say restructuring moves “strengthened the balance sheet” of the indebted forecourt and foodservice giant in 2023, despite a slip in full-year profits largely because of “oil volatility”.
It comes after the group completed a deal in October to sell to Asda most of its UK and Ireland fuel, foodservice, grocery, and merchandise business for £2.27 billion. Brothers Mohsin and Zuber Issa, who are joint CEOs of EG, also own a majority stake in the supermarket giant with private equity firm TDR capital.
The divestment saw EG retain around 30 UK sites, including the first Euro Garages site in Bury.
Meanwhile, in December, the group announced that it had entered a definitive agreement to sell its 218 KFC franchise outlets in the UK and Ireland to Yum! Brands’ KFC division. EG, currently the largest KFC franchisee in the British Isles, says the sales proceeds from that transaction will also be used to pay down debts.
During 2023, EG also entered sale and leaseback agreements for US properties and disposed of other US assets, generating combined proceeds of $4 billion (£3.15 billion).
In its annual results, EG, which reports in dollars, said underlying EBITDA fell by 7% to $1.1 billion, although foodservice performed strongly. The group has been investing heavily in its continental Europe foodservice portfolio.
The Financial Times reported this week that EG is in talks to sell some of its assets in the UK and Ireland to Zuber Issa, with a deal likely “in the near term”.
The move illustrates the complex relationship between the billionaire brothers, who took on their original Euro Garages forecourt in Bury 2001, and bought their stake in Asda, with TDR, in a debt-funded acquisition from US retailer Walmart in 2020. The siblings split their day-to-day responsibilities, with Zuber running the forecourt business from Blackburn, and Mohsin taking charge of Leeds-headquartered Asda.
