Restructuring sees Asda ‘sold’ for £6.9bn
YORKSHIRE-based supermarket chain Asda has underlined that it is still owned by the world’s biggest retailer Wal-Mart despite it being “sold” for £6.9bn in a restructuring deal.
Leeds-based Asda has been restructured for £6.9bn to an investment vehicle called Corinth Services, also based in the West Yorkshire city, for only £200m more than it paid for the UK supermarket chain in 1999.
The restructuring, which had been undisclosed until now, took place in August but Asda said it was “a financial restructure on paper” .
Wal-Mart let its subsidiary Wal-Mart Stores (UK) sell 3.1bn ordinary shares in Asda in return for a £5.7bn cash payment from Corinth, a fellow Wal-Mart group company, and £1.24bn in shares, it was reported.
The deal also saw five Asda directors, including marketing director Rick Bendel and retail director Andy Clarke, appointed to the board of Corinth, joining existing directors Andy Bond, Asda’s chief executive, and Judith McKenna, Asda’s finance director.
Asda told the Daily Telegraph the deal was a “group reconstruction”, which valued the company at “historic book value” rather than the result of an independent revaluation.
A spokesman said that it had been done “for good financial management” reasons. He declined to comment on whether the move was tax driven, but said that all the companies were registered in the UK.
He said: “From 2009 Corinth is the new parent company of Asda Group, having previously been a subsidiary. As part of good financial management of our business we will, from time to time, alter that structure as appropriate.”
The deal means that Corinth, which does not employ any staff other than the seven directors, will receive Asda’s dividend payments, which last year stood at £160m.
