Issa brothers slash investment at petrol station empire amid debt crisis

The billionaire Issa brothers have slashed investment at their petrol station empire as they battle to pay down debts.

EG Group, the forecourt business owned by Mohsin and Zuber Issa, spent 37pc less on investment last year in what executives called a “controlled reduction” to maximise liquidity.

The Blackburn-owned company, which controls thousands of petrol stations around the world, spent $243m (£191m) on growth in 2023. It did not explicitly lay out where capital expenditure was reduced but the business had invested heavily in US expansion in 2022.

By contrast, EG Group said US chief John Carey had expanded “with minimal capital spend” last year.

The cutback comes as EG races to reduce its debt pile in the face of high interest rates. The company has been selling off assets to pay down debts and reduced its borrowing pile from $10bn at the start of 2023 to $6bn by the end of the year.

In a joint statement, Mohsin and Zuber Issa said they had “strengthened” EG’s balance sheet. The pair said they were committed to cutting debt further.

It comes amid close scrutiny of the high levels of debt within the Issa brothers’ businesses.

Debt levels at EG have become intertwined with those at Asda, which is also owned by the Issas. Last year, EG sold the majority of its UK and Ireland business to the supermarket chain for $2.5bn (£2bn). Asda’s debt pile stands at around £4.2bn. 

Soaring interest rates have driven up debt servicing costs for both Asda and EG. The petrol station operator did not provide a full set of accounts but said underlying earnings excluding things like interest, investment costs, taxes and the depreciation of assets fell by 7pc to $1.1bn in 2023.

EG has been seeking to offload other portions of its sweeping empire to pay down its debt pile. It sold off its network of 218 KFC franchises last December.

MPs have raised questions over the complexity of the Issa brothers’ empire, with Mohsin Issa criticised by members of Parliament’s business select committee for seemingly evasive answers during appearances.

MPs have questioned whether high debt levels have prevented Asda from being able to lower prices for shoppers, a charge executives have denied.

Asda has been losing ground in the battle for customers. The most recent figures from market research company Kantar show the supermarket lagged behind all its major rivals on sales growth. Its share of the grocery market has fallen from 14.3pc a year ago to 13.8pc.

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