In the same week of reporting that the EG Group was exiting from the Italian forecourt market, the firm announced it is moving on its Australian business, selling around 540 fuel and retail sites for A$1.1 billion (£530m).
All locations are going to Australian firm Ampol, the country’s largest fuel retailer, which has around 1,800 forecourts and maintains interests in refining and importing fuel. Ampol will pay EG Group A$850m cash (£409m) and A$250m (£120m) in stock as part of the deal.
EG Group says it has sold its Australian interests to “develop its core market operations, strengthen its balance sheet and reduce leverage”, with the move coming amidst a desire to reduce its debt commitments, which were thought to stand at around $5bn (£3.7bn) prior to the Italian and Australian deals being announced.
The company is half owned by TDR capital, with the remaining 50% split equally between brothers Zuber and Mohsin Issa, who are also non-executive directors on EG Group’s board.
The firm is thought to be planning a stock-market flotation, but Zuber Issa recently made a rare public intervention after telling the Financial Times he believes the company should raise funds by selling its US business, which is responsible for 50% of all profits, rather than issue an IPO.
Russ Colaco, EG Group’s chief executive, said the Australian transaction “is a significant milestone in our ongoing efforts to streamline EG Group’s global portfolio and sharpen our focus on the markets where we see the largest growth opportunities”.
Colaco thanked his firm’s Australian leadership team and colleagues for their “significant contributions to the business”, and said the company remains focussed on “building a platform for further growth, with our world-class grocery & merchandise, foodservice and fuel retail proposition”.
