EG Group continues to deleverage through repriced loans and repayments
Blackburn-based EG Group, the international operator of convenience retail, foodservice and fuel stations, has revealed further progress with its bid to deleverage its finances.
It has repriced its Euro and US Dollar Term Loans, and fully repaid its second-lien facilities.
It said on November 27, 2024, EG Finco, a subsidiary of EG Group, repriced and simultaneously upsized the principal amount on its EUR Term Loan B (EUR TLB) to €1.634bn, or $1.831bn-equivalent, reducing the margin by 100 basis points to E+4.50%.
The principal amount gives effect to a €153m repayment from proceeds received from recent asset disposals and a €510m upsize.
On December 10, 2024, EG America, a subsidiary of EG Group, also repriced and simultaneously upsized the principal amount on its US Dollar Term Loan B (USD TLB) facility of $1.7bn, reducing the margin by 125 basis points to S+4.25%.
The principal amount gives effect to a $203m repayment from proceeds received from recent asset disposals, and a $210m upsize.
Investors’ additional demand for the repriced term loans, which reflects confidence in the group’s performance and strategy, will enable the group to fully repay its €610m in outstanding principal amount of second-lien facilities (E+7.00%), and to fully repay the remaining principal amounts outstanding on the 2026 US Dollar and 2028 GB Pound Term Loans of $58m and £39m, respectively.
No other material changes were made to the terms of the USD TLB and EUR TLB facilities, the maturity date of which remains February 7, 2028.
These transactions follow strong recent progress with the group’s deleveraging plan, following completion of a number of non-core asset disposals in the final quarter of 2024 and generating more than $400m equivalent of proceeds to repay debt.
This, coupled with group’s strong performance and improved free cash flow during the year, resulted in Moody’s upgrading the outlook of the business from negative to stable.
These repricing transactions will result in a material reduction in EG Group’s annual financing costs and unlock additional free cash flow for the group to invest in growth opportunities.
The group said it remains committed to continued deleveraging through consistent execution of its financial policy.
As previously announced, EG Group grew underlying EBITDA by 10% in the nine months to September 30, 2024, driven by earnings growth across all key business streams, and a notably strong performance in the USA.
CEO and co-founder of EG Group, Mohsin Issa, said: “I am pleased that we have delivered further progress with our successful deleveraging and refinancing strategy, which is central to the execution of our strategic objectives.
“The successful repricing will materially reduce our financing costs, enabling us to invest further in the growth of the business.”
He added: “This transaction is a vote of confidence in EG Group’s strategy and performance from investors. We thank them for their continued support and look forward to pursuing the opportunities ahead of us.”
Rising interest rates have put a strain on the finances of the business so a deleveraging process has been under way.
Last month EG sold 19 convenience stores in Kansas and Missouri for $21m. Separately, in June 2024, the group agreed to sell a further 39 stores located in Illinois for $38m.
The group used proceeds from these disposals to fully repay a bridging facility. In addition, cash flow initiatives allowed full repayment of the Rolling Credit Facility in September 2024. Following these steps, the group was able to fully address its near-term debt maturities.
