Co-op to sell forecourts arm in debt reduction drive
The Co-op Group is in talks to offload its forecourts business for about £450m to reduce its debt and improve its balance sheet.
Discussions about the sale of the 130-branch business are reportedly at an advanced stage.
Sources said on Friday the business was expected to be sold to a trade buyer, with a deal potentially being agreed in the coming weeks.
Bankers at Rothschild are advising the Co-op on the deal.
News of the prospective sale comes in the same week that the company announced the appointment of Shirine Khoury-Haq as its first female chief executive.
The group, which is best known for its supermarkets and funeral care operations, is striving to reduce its borrowings at a time when inflationary pressures and deteriorating economic backdrop are expected to hamper its profitability.
If the sale of the fuel retailing arm goes ahead, it will be the latest in a series of divisions to have been offloaded by the Co-op over the past decade.
Raising a further £450m would help tackle the group’s net debt, which soared to £920m, according to its last set of results, up from £695m in 2019 and £550m in 2020.
It previously disposed of its chain of pharmacies and travel shops, and is no longer a shareholder in the Co-operative Bank after a number of crises that almost led to its collapse.
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