Asda said it had repaid the loan facility that it borrowed to buy Co-op’s petrol forecourts
Asda has paid off £200million of its billion-pound debt pile.
The country’s third largest supermarket said it had repaid the loan facility that it borrowed to buy Co-op’s petrol forecourts business last year. Asda, which was acquired by billionaire brothers Mohsin and Zuber Issa in 2021, said its debt pile was now around £4.6billion.
But this is a much lower figure than the one estimated by credit ratings agency Moody’s, which placed its debt pile at around £7.5billion.
The Issa brothers bought the supermarket for £6.8billion in a debt-fuelled binge deal.
Clive Black, head of research at Shore Capital, said that despite yesterday’s ‘good news’ relating to the Co-op deal, Asda was still a ‘very heavily indebted’ firm.
High debt means it ‘has less room to be as competitive as they want to be’ on prices for shoppers.
‘As a result rivals like Tesco and Sainsbury’s, which have lower debt piles, have succeeded in gaining market share, Black said.