Supermarket chain founder ‘relaxed’ over impending sale of 63% stake

South African investment vehicle Brait is preparing to sell off a range of stakes in key British firms, including its controlling share in Deeside supermarket chain Iceland.

Brait must repay a £350m bond next year and is lining up several of its key assets in preparation, including gym group Virgin Active and the New Look retail business.

In a statement to the South African stock exchange Brait revealed that it aims to offload all its assets, given shareholder approval, in January 2020.

Retail entrepreneur Christo Wiese is the largest shareholder in Brait, with 28%, and he was behind a 2015 acquisition raid on UK retailers which has failed to deliver the returns anticipated.

The South African investor first bought a 12% stake in Iceland in 2012, and has since increased that to 63%, with the remaining 37% belonging to founder and executive chairman Sir Malcolm Walker, his son Richard and other members of the management team.

It is estimated that Brait’s stake in Iceland is currently worth around £141m.

Reports claim that Ethos Private Equity is likely to assume Brait’s shareholding in Iceland. Sir Malcolm has been quoted as saying he is “relaxed about the whole thing”.

He has also insisted that he believes the 63% stake will not be sold without his agreement.

In June Iceland published its full year results which showed a 4.5% increase in sales to £3.084bn, although adjusted EBITDA of £140.1m was down £13m on a comparable 52 week basis.

During the six months to September 13, sales rose 2.4%, but the chain suffered a £7m pre-tax loss, compared with a £3m pre-tax profit in the same period a year before.

Net debt increased by £39m to £736m.