Asda has sold off dozens of supermarkets as its private equity owners race to reduce a £3.8bn debt pile.
The struggling retailer, majority owned by TDR Capital, said on Thursday it has struck a £568m deal with two buyers to offload 24 supermarkets and one depot, in the latest move to raise funds from its estate.
Under the agreement, Asda is selling 20 stores and a depot in Leicestershire to Blue Owl, the Wall Street private credit group, and Supermarket Income REIT for £467m.
Another 10 sites have been sold to investment managers DTZ for £101m.
Asda will continue to occupy the sites through a so-called sale-and-leaseback, with the retailer signing up to a 25-year lease with an option to extend for another 10.
An Asda spokesman said: “Asda’s property strategy is centred on maintaining a strong freehold base while also taking a considered and selective approach to unlocking value from our estate where appropriate.”
They said the deals “reflect that approach, enabling us to realise value from the sites while retaining full operational control”.
The spokesman added that the proceeds would be used to “fund our ongoing capital investments in the business and reduce net leverage”.
Asda is expected to use part of the cash to help repay a looming debt repayment to its former American owner Walmart.
According to Moody’s, the company has around £1bn of liabilities to address by 2028, including a £900m bill owed to Walmart.
Timo Fittig, a Moody’s analyst, said the deal “enables the company to address upcoming debt and preference share maturities with the proceeds raised”.
However, he said it would “increase its long-term debt burden through the additional leases”, warning that the lease liabilities would likely exceed the amount of proceeds raised.
Mr Fittig said: “As such, the transaction will likely increase the company’s total debt position, including leases, even if it uses most of the proceeds to repay debt.”
