Discount applied for early repayment on supermarket deal

Sir Malcolm Walker

A deal has been agreed with the founder of Deeside-based supermarket chain Iceland for a £5m discount linked to early payment for the remaining stake in the high street retail chain.

In June this year it was announced that Sir Malcolm Walker, who set up the business 50 years ago, and chief executive Tarsem Dhaliwal, would pay £115m for the 63% stake held by South African conglomerate Brait, taking the business back into family control.

A first tranche of £60m was paid at the time, with £26.9m due next July and the remaining £28.1m 12 months later.

A statement released this June said: “NewCo may settle the deferred payments in full, or in part, at any time on or before these payment dates, in which case a rebate for early repayment shall be applied.”

But both sides have agreed to settle the full sum now, in return for a discount worth around £5m, according to Sky News.

It is understood that Brait sought the early payment to concentrate on its other operations, including the New Look fashion chain, and Virgin Active, which has been affected by the coronavirus pandemic in its main markets of the UK and South Africa.

Brait originally agreed to sell its majority shareholding because it needed to raise cash to repay a £350m bond.

Iceland employs around 25,000 staff across its 1,000 stores.

When the deal was announced in June this year, Sir Malcolm said: “Over the last half century we have had a series of external investors in our business but I have no hesitation in saying that Brait has been the best.

“They have been consistently understanding and supportive, and were friends as well as business partners. I am sure that friendship will endure, and Tarsem and I wish them every success in the future.”