(Bloomberg) -- British retailer EG Group Ltd will seek to amend and extend term loans due in 2025 in upcoming weeks, according to a person familiar with the matter.
The network of gas stations and convenience stores, run by billionaire brothers Zuber and Mohsin Issa and buyout firm TDR Capital, has £4.4 billion-equivalent of loans maturing in 2025, the company’s 2022 annual report stated.
A spokesperson for EG Group declined to comment. The firm is set to hold its first quarter results on Thursday.
The plan to amend and extend EG Group’s 2025 term loans follows its recent sale of its UK and Ireland gas-station business to Asda, a British grocer belonging to the same owners.
EG Group will use the total $4.2 billion proceeds from that deal and a recent sale and leaseback transaction of some of its US stores, along with a smaller asset disposal in the US, to fully repay its senior secured bond due in 2024 and to repay senior debt on a pro rata basis across term loans and senior notes, the person said, who asked not to be identified because the information is private.
The move will reduce the company’s total outstanding debt maturing in 2025 to below $5 billion, they added.
EG Group is aiming to address its other debt maturities no later than twelve to fifteen months prior to their due date, the person said. The company has a total debt burden of £8.1 billion.
UK Challenges
EG Group is one of a number of UK firms facing a race against time to refinance junk debt maturing in 2025.
These companies risk ratings downgrades and a loss of access to banking facilities if their debt has less than a year to run before maturity. But it’s likely to prove expensive for firms to rework their capital structures: For high-yield bonds the implied cost is about double what they currently pay to service them.
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