Britain's EG Group targets debt reduction as earnings edge higher

LONDON (Reuters) - EG Group, the petrol forecourt and retail company whose owners also control British supermarket Asda, reiterated its commitment to cut its debt mountain as it reported a 1.9% increase in core earnings for 2022.

The group, which is headquartered in Britain and trades from over 6,600 sites across the UK, Ireland, the U.S. and Australia, is owned by Zuber and Mohsin Issa and private equity group TDR Capital.

"Management is committed to further significant deleveraging and is actively exploring additional opportunities to put in place a sustainable capital structure for the group to underpin our long-term strategy," Zuber Issa said in a statement.

The group has taken the first steps in this process - agreeing a $1.5 billion sale and lease back deal on 415 sites on the U.S. east coast with Realty Income Corporation, and a $48 million disposal of 26 non-core sites in its central U.S. portfolio.

EG will use the proceeds to repay net debt, which was $9.6 billion at the year end, according to a person with knowledge of the situation.

The transactions are expected to complete in the second quarter of 2023.

In January, the Times reported that the Issas and TDR were exploring a merger of EG and Asda. All parties declined to comment on the report.

EG said core earnings, or EBITDA, were $1.46 billion in 2022 on total revenue up 25.1% to $33.04 billion.

“Looking ahead, we remain confident that EG is well-positioned to continue to outperform the wider market and execute on our strategic objectives," said Zuber Issa.

(Reporting by James Davey; editing by Sarah Young)