Asda owners piled on nearly £1.5bn of new liabilities that are not counted in the supermarket’s headline debt figures to finance the buyout of EG Group’s petrol stations business.
The grocery chain revealed a £2bn takeover of the UK and Irish operations of EG Group last year, which is also owned by the billionaire Issa brothers and private equity firm TDR Capital.
According to The Financial Times, new documents accompanying a new bond sale show the deal was achieved by creating other forms of liabilities that do not count towards its £4.84bn debt load.
The was made up of £646m from sale and leaseback deals, £400m from borrowing against ground rents, and a £401m from a shareholder loan that recycled proceeds from a previous property transaction.
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These deals all happened last year and are in addition to a £684m loan from investment firm Apollo, which did count towards the supermarket’s debt figures.
Asda told the publication that the “structure of the [EG] deal was clearly communicated to all financial stakeholders at the time”, that its financial reporting was “very consistent” and followed an accounting convention of subtracting lease and ground rent payments from its earning figures.
The transactions are the latest examples of financial engineering that TDR Capital and the Issa brothers have used in their retail and petrol empire.
Last week it emerged that the brothers had borrowed an additional £7m from EG Group last year to pay for their private jets.
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