EG Group, the debt-laden petrol group owned by the billionaire Issa Brothers, has offloaded all of its franchise KFC sites in the UK and Ireland to the US multinational behind the fried chicken empire.
The sale is the latest ploy by the duo behind the Blackburn-based forecourts group to reduce its mounting debt pile.
Last year the company racked up as much as $9bn (£7bn) in arrears — the majority of which was made of loans with interest rates tied to LIBOR and EURIBOR — a benchmark which represents the average rate that banks estimate they would be charged when borrowing from other banks.
These rates have skyrocketed in recent months, leading to hikes in the amount of interest the firm has to pay on their debt, the Evening Standard reported previously.
Earlier this year, the UK arm of EG Group was sold to supermarket Asda — which is also owned by the brothers — and the firm carried out a slew of sale and leaseback deals in the US to reduce its mountain of owed money by 41 per cent.
Zuber Issa and Mohsin Issa of EG Group said today that the sale of its KFC franchise is the latest transaction in its “significant deleveraging” plan.
They said: “Now is the right time to hand the baton to the KFC leadership team to continue to grow the brand in the UK. This is the latest transaction in our significant deleveraging this year — to put in place a sustainable capital structure.”
As part of the sale, all of EG’s KFC UK and Ireland business — over half of which is made up of drive-thrus — and 7,800 team members will come under KFC UK and Ireland management, which is owned by US fast food giant Yum! Brands.
Meg Farren, managing director of KFC UK and Ireland, added: “EG has played an important role in helping KFC expand its footprint across the UK and Ireland, and the KFC brand has been a big part of EG’s own growth in recent decades.”