The UK’s third largest supermarket group Asda has refinanced over £3.2 billion of debt, pushing the majority of its maturities into the next decade.
It was reported on Friday as the supermarket has been burdened by high debt since it was purchased by brothers Zuber and Mohsin Issa and private equity firm TDR Capital.
They purchased the retailer from Walmart in a £6.8 billion deal in 2020, leaving the US retail giant with a 10% stake.
Asda’s interest costs in 2023 were £225 million.
The supermarket group’s finance chief Michael Gleeson noted that the refinancing followed rating agency Moody’s recent upgrade of its corporate rating.
Gleeson said, “We saw strong demand from investors after taking a thoughtful and prudent approach to refinancing our near-term debt well ahead of maturities – to further strengthen our balance sheet.”
Last month, Asda reported a 24% jump in 2023 earnings to over £1 billion.
However, industry data showed that Asda continued losing market share to rivals last month, including market leader Tesco and number two retailer Sainsburys.
Market researcher NIQ reported earlier this week that Asda’s sales were down 0.9% over 12 weeks to 20 April year-on-year.
Market share for the group was down 70 basis points on the year.
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