UK-based independent convenience retailer EG Group has agreed to sell a portfolio of its sites on the east coast of the U.S. to Realty Income Corporation, an S&P 500 company, for $1.5 billion in a sale and leaseback transaction.
This portfolio, which EG America will continue to operate and trade, comprises 415 store assets under the Cumberland Farms, Fastrac, Tom Thumb and Sprint banners.
The transaction is expected to close in the second quarter of 2023, subject to customary closing conditions, and the Group will use net proceeds to repay debt. The assets represents just c.15% of the Group’s total freehold property in 10 markets, reflecting how its estate continues to be underpinned by strong asset backing globally.
Following completion, EG will pay an initial rent of $103m per annum with respect to these assets. Further information will be provided to investors in EG Group’s Q4 and full-year 2022 trading update call on Thursday 9 March, 2023.
This transaction is in line with management’s commitment to reduce total net leverage through debt reduction and free cash flow generation, as communicated in EG Group’s Q3 trading update in November 2022.
Zuber Issa, CBE co-founder and co-CEO of EG Group, commented: “Today’s announcement demonstrates the progress we continue to make to put in place a robust capital structure for the medium term that will underpin our long-term strategy and represents an important first step in this process.”
New York Stock Exchange-listed Realty Income is an S&P 500 company structured as a real estate investment trust.