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The Co-op has hired advisors to sell its petrol forecourts operation in a bid to raise £450m, with the Issa brothers-owned Asda the front runner to buy the business, according to reports.
A deal could be agreed as quickly as this week in an auction being run by bankers at Rothschild, Sky News reported over the weekend.
A purchase of the 130-strong Co-op petrol station estate would herald a long-awaited move into the convenience store market for Asda, which is owned by the Issa Brothers, who also run forecourt giant EG Group.
The proceeds from any sale would help the embattled mutual pay down its large debt pile and strengthen its balance sheet.
News of a the potential disposal comes just days after the Co-op confirmed Shirine Khoury-Haq would take the reins as CEO permanently following four months in the role on an interim basis.
It comes at a time of considerable upheaval at the group, with Khoury-Haq implementing a round of job cuts that could affect 400 head office staff.
The Grocer also revealed in July that the cuts were linked to plans to slash spending on change and transformation projects in 2023 by £47m as part of wider cost-cutting measures.
Figures from its latest set of annual accounts show net debt at the Co-op ballooned to £920m, compared with £695m coming out of the 2019 financial year and £550m in 2020.
A sale of the petrol stations would be just the latest in a long string of sell-offs for the the Manchester-headquartered group following disposals of the pharmacies chain, travel shops and its remaining stake in the Co-operative Bank.
Morning update
DP Poland, the operator of Domino’s pizza stores and restaurants across Poland and Croatia, announced CFO. Malgorzata Potkanska will step down from her position as of 30 September 2022.
The company intends to appoint Edward Kacyrz to the board as executive director and CFO subject to the completion of normal regulatory due diligence being carried out.
Kacyrz is a chartered accountant with 18 years of experience, during which time he has held a number of financial, strategy and management roles at Mars, Levi Strauss and Kimberly Clark in Poland.
Having started his career in accounting and finance roles, he progressed into business development, corporate development and strategy at Velvet Care and most recently at Smyk, Poland’s leading toys and children apparel retailer.
CEO Nils Gornall said: “Edward brings technical and leadership skills as well as a can-do attitude, which will all be highly welcomed within our organisation. His experience in the retail and ecommerce space, alongside his extensive financial experience, will further strengthen our capacity to increase sales and profits.”
Elsewhere, it is a quiet start to the week on the markets following the summer bank holiday weekend.
The FTSE 100 opened on the front foot, rising 0.7% to 7,480.68pts.
Early risers included Naked Wines, up 7.7% to 135.5p, G;anbia, up 7.4% to €12.78, Coca-Cola HBC, up 3.3% to 2,046p, and British American Tobacco, up 2.1% to 3,533.5p.
Losers so far included Science in Sport, down 4.1% to 29.3p, Wynnstay Group, down 3.1% to 572p, Haleon, down 2.3% to 260.2p, Bakkavor, down 1.5% to 83.7p.
This week in the City
It is looking like another quiet week ahead as we enter the dog days of the summer holidays.
Tomorrow brings the latest inflation data from the BRC and NielsenIQ with their shop price index. In the US, CostCo and Jack Daniel’s distiller Brown-Forman release quarterly figures.
French spirits group Pernod Ricard publishes its latest quarterly results on Thursday morning, while in the US, Hormel Foods and Campbell Soup report.
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