Issa brothers face fresh blow as Moody’s downgrades EG Group debt

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Issa brothers face fresh blow as Moody downgrades EG Group debt
Moody's cites unexpected departure by Deloitte as auditors among reasons for EG Group debt downgrade.
// Moody’s downgrades EG Group from corporate family rating to B3 from B2 and its probability of default from B2-PD to B3-PD
// Another blow for Issa brothers after abrupt departure of Deloitte
// Moody’s cites “limited progress in terms of financial reporting and governance” as reason by downgrade

The billionaire businessmen on track to buy Asda this week saw their debt rating cut by credit agency Moody’s.

Zuber and Mohsin Issa’s petrol station empire EG Group was criticised by Moody’s for failing to improve its financial reporting and management processes after two years of what it deemed to be “large-scale” merger and acquisition activity.

Moody’s announced the rating action on Wednesday, saying that it reflected the company’s “limited progress in terms of financial reporting and governance with regards to internal controls and board composition”.

“Moody’s understands that this has contributed to the recent resignation of its auditors and their replacement with new auditors,” the agency said in a statement.


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“Moody’s also acknowledges that the group’s 2019 accounts received an unqualified opinion by Deloitte and understands that the appointment of KPMG as new auditor followed an extensive on boarding process, that there have been no accounting or auditing disputes between EG and Deloitte, and that Deloitte continues to audit the group’s Australian operations,” the agency added.

The Blackburn-based group has been downgraded to the corporate family rating to B3 from B2 and its probability of default from B2-PD to B3-PD.

A spokesperson for the Issa brothers speaking to the Telegraph said they strongly disagreed with Moody’s decision.

The brothers own more than 6,000 petrol stations across 10 countries with EG Group.

Last week it emerged that the group’s chief financial officer Michael Hughes reportedly considered quitting the petrol station empire following its acquisition of the Big 4 grocer.

According to a report by the Sunday Times, Hughes had planned to resign and take up a post at a different company by the end of the year, which would have raised further concerns among EG Group’s debt investors.

Nevertheless, Hughes has decided to stay with EG Group for an unspecified period.

The company said that Hughes had “not resigned, and nor does he intend to resign, as chief financial officer of EG Group”.

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5 COMMENTS

  1. Asda will grow under their ownership they have performed miracles with their EG Group also a family company so wish them well.

    • You sound very bitter towards the Issa brothers BP makes more money on their Wild Bean Coffee outlets than selling petrol Coca-Cola makes billions selling SOFT DRINKS so please don’t knock success God knows we need them to create more wealth

  2. You sound very bitter towards the Issa brothers BP makes more money on their Wild Bean Coffee outlets than selling petrol Coca-Cola makes billions selling SOFT DRINKS so please don’t knock success God knows we need them to create more wealth

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