The new owners of Asda have announced plans to take on approximately £3.5 billion in debt financing, sell its petrol station business, and intend to sell distribution sites pending regulatory approval.

In October, the Issa brothers, founders of petrol forecourt firm EG Group, and TDR Capital finalised a £6.8 billion deal to take control of Asda.

On Wednesday, Mohsin and Zuber Issa revealed that the company would establish a loan facility worth 840 million euros (£740 million) and issue around £2.75 billion in loan notes to finance the acquisition.

The Issa brothers and TDR Capital also plan to sell some of Asda’s distribution network to property investors, contingent on approval from the UK’s competition regulator. Operations across the distribution network will remain unchanged, with Asda retaining them on a lease-back arrangement.

EG Group has confirmed an agreement to buy Asda’s forecourt business for £750 million as part of the financial restructuring. EG, which operates more than 6,000 forecourts globally, expects the petrol station acquisition to complete in the second quarter of 2021. Combining Asda’s forecourt business with EG is anticipated to drive the expansion of more Asda on the Move convenience stores at existing EG petrol stations.

In a joint statement, the Issa brothers said: “We are putting in place a robust capital structure to support that growth strategy, and we are confident that external investors will share our belief in Asda’s strong fundamentals and exciting future prospects.

“Looking ahead, and subject to the required regulatory approvals, we look forward to working with our Asda colleagues to build an even stronger, more differentiated retailer – including through the investment of more than £1 billion in the next three years to further strengthen the business and its supply chain.

“We are also excited about the proposed integration of the Asda forecourts into EG’s established UK operations, which we believe would underpin the future growth of the combined network.”

Asda chief executive Roger Burnley commented: “Whilst the transaction remains subject to CMA approval, we will work closely with our new owners on how these Asda sites would operate as part of the EG Group under the Asda brand and ensure they continue to be a price leader in the fuel sector.

“We know that our customers are enduring a challenging time with the latest lockdown and we continue to serve them the best we can through our stores and growing online delivery slots.”

Gary Lindsay at TDR Capital added: “We are very proud to be investing alongside Mohsin and Zuber and supporting the next phase of Asda’s exciting growth journey.

“Asda has strong foundations and under the leadership of Roger and his team we look forward to seeing the business move from strength to strength in the future.”