In cooperative talks to sell 130 petrol pumps in an effort to reduce debt
Co-op Group is in talks to sell 130 of its petrol stations for £450m as the business seeks to reduce its debt in anticipation of a potentially severe economic downturn.
According to Sky News, investment banks are advising the sale to Rothschild’s Banker Co-op, possibly to a buyer already active in fuel retailing. A spokesperson for the Co-op declined to comment.
Should the deal go ahead, it will mark the latest in a long line of asset sales by the group, which has sold its pharmacies and travel agents and no longer holds a stake in the cooperative bank as of 2017.
Raising a further £450m will help tackle the group’s net debt, which rose to £920m, from £695m in 2019 and £550m in 2020, according to its final set of results.
A deal would also extend the duration of the flow in ownership of Britain’s network of more than 8,000 petrol stations, as they are in place in the multi-billion-pound acquisition of UK supermarkets.
In June, the Competition and Markets Authority accepted an offer from Clayton, Dubillier & Rice, a US private equity firm, to sell 87 Forecourt as a condition of Morrison’s acquisition.
CD&R has since sought a buyer for its Motor Fuel Group (MFG), which is valued at around £5 billion, but has struggled to secure interest amid an uncertain economic outlook.
MFG is the UK’s largest independent petrol station operator, with approximately 900 forecourts.
Last year, the billionaire petrol station tycoons Issa brothers agreed to sell 27 of their courthouses to address concerns of competition watchdogs and secure their £6.8bn takeover of Asda.
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The petrol retail industry has come under scrutiny this year with allegations of profiteering from record prices of diesel and petrol.
In June, the trade secretary, Quasi Quarteng, asked the CMA to urgently review petrol station operators, amid concerns that retailers had not cut fuel charges recently.
