The billionaire Issa Brothers, who own Asda, agreed to sell more than 200 KFC restaurants as part of their plan to reduce their large debt.
EG Group has announced that it will sell its 218 KFC franchises located in the UK and Ireland, to Yum Brands of Kentucky.
The proceeds of the sale , which should be completed in the first half 2024, will be used to pay off debt.
Blackburn brothers Zuber Issa and Mohsin Issa are trying to reduce the pressure placed on EG Group which operates thousands upon thousands of petrol pumps worldwide.
At the end of the last year, the company had accumulated a $9.6bn debt (£7.6bn), but the rising interest rates have increased the cost to service this debt.
Last month the company announced that it had made “significant” progress in paying off its debts. These are believed to have dropped to $5.7bn as EG Group sold their UK assets to sister-company Asda for $2.50bn.
The Issa Brothers announced that selling KFC is part of their plan to reduce debt and establish a stable financial structure for the Group.
The company added that they continue to make progress in achieving their key strategic goals – delivering world-class foodservice, grocery and merchandise and fuel offerings across nine global markets.
Yum, who also owns Pizza Hut, Taco Bell, and other franchises, says the deal will help it accelerate KFC’s growth in UK and Ireland.
The fried chicken chain’s sales rose by 5% this year across all 1,040 restaurants.It plans to open 500 more sites by the end the decade.
All of EG Group’s privately owned KFC franchises will be sold, including the drive-thrus. Over 7,800 staff members and 7800 KFC UK & Ireland employees will also come under KFC UK & Ireland management.
EG Group has announced that it will continue operating its Cooplands Bakery business worldwide, as well other franchises such as Starbucks, Subway, and Greggs.
EG Group is making progress in paying off its debt, but The Issa Brothers continue to face financial pressures with Asda.
Asda’s acquisition of EG UK has increased the supermarket chain’s debts by £684 million, making the total debt approximately £4.6 billion.