Disposal of Co-op Group’s petrol forecourts division expected to raise £450m

The Co-op Group is seeking to dispose of its petrol forecourts business, which is expected to raise around £450m.

The sale is aimed at reducing the Manchester-based group’s debt levels and strengthen its balance sheet, according to a report by Sky News.

Around 130 petrol stations could be included in the sale, which is said to be at an advanced stage with a trade buyer.

It is claimed that supermarket giant, Asda, is leading the pack to acquire the forecourt portfolio.

Asda was taken over in a £6.8bn deal last year involving TDR Capital and the Issa brothers, who are behind Blackburn-based international fast food and petrol forecourts-driven EG Group.

However, sources insist that the Co-op negotiations involve Asda, and not EG Group

Sky claims bankers at Rothschild are advising the Co-op.

Any potential sale is likely to have been sanctioned by Shirine Khoury-Haq, who was officially confirmed as the group’s chief executive earlier this week.

She was appointed interim CEO, the first female to hold the position, on March 25 this year, after Steve Murrells announced he was stepping down from the post, after 10 years with the group.

A sale of its petrol forecourts would be the latest division to be offloaded by the Co-op, following the previous sale of its pharmaceutical and travel shops businesses.

In 2019 the Co-op was seeking to increase its presence in the fuel filling stations sector, embarking on a programme to acquire or redevelop existing and new locations, linked to an investment worth more than £40m since 2015.

The Co-op Group declined to comment.