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(Sharecast News) - Asda agreed to sell 24 supermarkets and its Lutterworth distribution depot in a 568m sale-and-leaseback deal, it announced on Thursday, as the debt-burdened retailer seeks to strengthen its balance sheet ahead of third-quarter results due next week.
The grocer said the portfolio was sold to two buyers, with four stores - in Small Heath, Colindale, Coventry Abbey Park and Killingbeck - acquired by DTZ Investors.
Blue Owl Capital would meanwhile buy 20 stores and the Lutterworth depot.
Asda said it would lease all 25 assets back on 25-year agreements, with options to extend for an additional decade, and said operations for staff and customers will continue unchanged.
The transactions came as Asda faced mounting pressure from a 3.8bn net debt pile and ongoing market-share losses.
Its sales fell 3.9% in the three months to 2 November, according to data from Worldpanel by Numerator, marking a one-percentage-point decline in market share over the year.
The retailer's parent company posted a near-600m loss last year as weaker trading and higher interest costs compounded the strain from the highly leveraged 6.8bn takeover mounted by the Issa brothers and TDR Capital in 2020.
TDR now holds majority control after buying out Zuber Issa earlier this year.
Asda said the deal aligned with its long-running property strategy.
"Asda's property strategy is centred on maintaining a strong freehold base while also taking a considered and selective approach to unlocking value from our estate where appropriate," a spokesperson said.
"These transactions reflect that approach, enabling us to realise value from the sites while retaining full operational control."
The company had executed several similar transactions in recent years, including the sale of most of its warehouses for 1.7bn in 2021 and 25 supermarkets for 650m in 2023.
Bonds fell after reports the latest proceeds would be used to pay down debt owed to Walmart, which still owns 10% of the business.
Reporting by Josh White for Sharecast.com.