Morrisons has confirmed it is set to wipe £331m off its debt pile following a 45-year ground rent deal with real investor Song Capital.
The private equity-backed supermarket has agreed for the investment firm to earn an income stream from 75 of its stores until 2069, as previously reported by Sky News.
The grocer will retain ownership of the stores’ freehold.
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The deal was announced alongside Morrisons’ quarterly results today (26 September).
The retailer was bought out by Clayton Dubilier & Rice in October 2021 in a near £10bn deal with the condition of not disposing of the stores freeholds.
However, that condition is understood to have expired and Morrisons is set to receive a £331m cash boost.
Morrisons chief financial officer Jo Goff said: “Every part of Morrisons – supermarkets, online, convenience, wholesale and Myton Food Group – showed good growth in the quarter, representing a robust performance across a diversified business.
“Today we have also announced a ground debt transaction with net proceeds of £331 million.”
She continued: “The properties will remain under Morrisons control and our retail estate remains over 80% freehold.
“This transaction follows the deleveraging from the disposal of our forecourt business at the start of quarter, and if the proceeds from this transaction were also used to reduce debt, on a pro-forma basis, our debt would be £3.6 billion, down 41% from its peak.
“Looking ahead to the full year, we expect increased EBITDA and further operational progress across the board.”
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