Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The billionaire British co-owners of supermarket Asda borrowed millions more from their petrol station company EG Group to repay debt they took on to buy two private jets.
EG lent Mohsin and Zuber Issa’s personal private jet companies $7mn in 2022, corporate filings show, on top of the €39mn in unsecured loans it gave them to buy the planes in 2018.
Of the extra debt, $5mn went to the company through which the Blackburn-born brothers own a Bombardier Global 6000, a model advertised as being ideal for transporting heads of state. The remaining $2mn went to the company through which they own a smaller Bombardier Challenger 350.
The payments are a sign of how closely the brothers’ personal and professional lives are intertwined at the petrol station group.
The Issas have built a retail empire from scratch with the backing of private equity group TDR Capital, with which they co-own both EG and Asda.
Together with TDR, they used debt-fuelled acquisitions to expand EG into a sprawling behemoth with more than 6,000 petrol stations spanning the US, Europe and Australia. Then, in 2020, the Issas and TDR agreed to buy Asda in a £6.8bn deal that marked the UK’s biggest leveraged buyout for a decade.
The brothers, who put in just £100mn in cash to buy Asda, have faced increasing scrutiny over their acquisitions and their companies’ finances over the past year. In July, Mohsin appeared before a parliamentary business and trade committee, at which the committee’s chair Darren Jones said his behaviour was “not in order”.
He said: “What we have heard today is that prices are up at Asda, tax is down, pay is down, money is being taken through a very complicated set of business structures to offshore companies, and you’ve not answered any of our questions.”
The brothers own the planes through two Isle of Man-registered entities. In 2018, EG handed the companies €39mn in unsecured, interest free loans which they used to buy the jets, the FT reported in 2022. The Isle of Man companies also borrowed from Bank of America, which charges interest and has security over the jets.
At the time of the FT’s report, people close to the matter said the EG loan’s generous terms had been flagged in an audit, and the brothers would start being charged backdated interest as a result. EG has not disclosed what interest rate has been applied.
The $7mn of new loans made in 2022 would be enough to cover all but $1mn of the amount EG reported it received in interest repayments from the two Isle of Man companies that year.
However, a person with knowledge of the matter said the money was actually used to pay interest and principal on external debt owed to third parties. They said the fresh loans are due to be repaid in full in November.
“As previously disclosed to the Financial Times in 2022, loans to the [Isle of Man] companies are fully disclosed in the EG Group accounts and continue to be so,” said EG Group.
“These loans have been provided at rates comparable to the average commercial rate of interest. The interest has been identified and recognised within EG Group’s finance income.” The brothers declined to comment.
Asda and EG have worked to bolster their governance in recent years, bringing in UK retail veteran Lord Stuart Rose as chair of both companies and former Land Securities chair Dame Alison Carnwath as chair of EG’s audit committee and a member of Asda’s board. In 2020, before their appointments, Deloitte resigned as EG’s auditor over governance concerns.
EY quit as Asda’s auditor last year. This month, Mohsin confirmed he was in a relationship with Victoria Price, a former tax partner who left the Big Four firm shortly after EY resigned as Asda’s auditor. The pair said in a statement that they were “building a life together”.
