Morrisons has agreed to sell 140 M local convenience stores for a consideration of about £25m in cash, to a team led by fuel industry veteran Mike Greene and backed by Greybull Capital.

Greene, who headed Jet’s retail offer and also worked with Shell during his career, revealed the stores would be re-badged as My Local.

He said: “The convenience sector continues to grow ahead of larger supermarkets as people’s hectic lifestyles increasingly lead them to favour more frequent, smaller and top-up shops.

“We are inheriting a set of good stores with highly trained teams of colleagues. With a new strategy tailored to the convenience sector, ‘My Local’ is confident of a profitable and sustainable future.”

He said there would be no job cuts as a result of the takeover but 200 new jobs would be created once the new team reopened 10 stores which were currently closed.

He added: “We are committed to the people who already work in the stores and we want to grow the business with them.

“We believe that their potential, combined with the expertise of our leadership team, will give us a distinct advantage in the sector.”

Greybull partner Nathaniel Meyohas said: “We are delighted to acquire Morrisons’ convenience store estate and we have every confidence that it will thrive under the leadership of Mike Greene and his highly experienced team. We are grateful for Morrisons’ support in completing this transaction to the benefit of all parties.”

Morrisons will retain five M local stores, which are either on forecourts or will be converted to small Morrisons supermarkets.

David Potts, Morrisons CEO, said: “Convenience is a large and growing channel in UK food retailing. Morrisons learnt much from its entry into the market, but M local was unable to scale.

“However, we remain open to other opportunities in convenience in the future. I would like to thank all the Morrisons colleagues for their hard work and dedication to M local.”

In March 2015, Morrisons announced a review of the M local business. That review concluded that M local would have required significant further investment in new sites, plus additional capital expenditure and lease commitments, to reach profitability.

In 2014/15, the M local stores to be sold recorded an operating loss of £36m, and gross assets were £68m. For 2015/16, the stores’ budgeted operating loss was £23m.

Greybull Capital is the private equity company which last year aborted a bid for the Murco UK business.