EG Group, the petrol forecourt and retail company that last week sold its UK operations to supermarket Asda, will seek to amend and extend its banking loans, it said on Thursday.
EG and Asda, Britain's third-largest grocer, are both owned by brothers Zuber and Mohsin Issa and private equity group TDR Capital.
'Extension'
"The group has already initiated a process with key relationship banks seeking both an extension of its RCF (revolving credit facility) and banking facilities, and has received good support in this process," EG said.
EG sold its UK and Ireland business to Asda for an enterprise value of £2.27 billion (€2.6 billion).
Proceeds
The group said proceeds from that deal, $1.4 billion (€1.29 billion) from an earlier sale and leaseback transaction in the United States and reduced capital expenditure will enable it to reduce net debt from $9.801 billion (€9.09 billion) in March 2023 to $5,375 billion (€498 billion) - reducing net leverage from 6.3 times to 4.9 times.
For the three months to March 31, EG's fiscal first quarter, it reported EBITDA of $228 million (€211.5 million) on a constant currency basis, on revenues of $7.2 billion (€6.6 billion), which it said was in line with management expectations.
Asda Deal
In May, Asda said it would acquire around 350 petrol stations and over 1,000 food-to-go locations in its EG deal, which is expected to close in the fourth quarter.
Asda said it planned to invest more than £150 million (€173.1 million) within the next three years to fully integrate the combined business.
As part of the transaction, the shareholders are providing around £450 million (€519.3 million) of additional equity to fund the transaction.
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