Caffè Nero thwarts Asda owner’s deal to take equity

Canadian giant Couche Tard is seen as the favourite should Asda’s new owners look to sell off their forecourt empire.
Industry sources believe recent acquisitions make a sale of EG’s UK business unlikely.
// Caffè Nero forces away latest threat from Asda owners after filing annual accounts on time
// Issa brothers finalised a deal in April which gave them control of £140m worth of Caffe Nero’s debts

Caffè Nero has seen off the latest threat from Asda owners – Issa brothers – after filing its annual accounts on time and pledging to meet all of its banking covenants.

Issa brothers finalised a deal in April which gave them control of £140 million worth of Caffè Nero’s debts.

Zuber and Mohsin Issa have since sought to acquire Caffè Nero to expand the chain into EG Group, their petrol forecourts business, and potentially into Asda.

READ MORE: Asda owners to fund legal challenge against Caffè Nero

Caffè Nero said it has repaid all bank loans from the Covid crisis and is forecast to meet all of its banking covenants for the next 12 months.

Caffè Nero’s annual accounts to the end of May 2020 show a 22 per cent decline in revenue to £239.7 million. It reported a pre-tax loss of £6 million.

Issa brothers agreed to buy Asda for £6.8 billion last year, and made an eleventh-hour bid to wrest control of Caffè Nero from founder Gerry Ford last November.

Swiss private equity firm Partners Group, which sold the debts to the Issas via investment bank Morgan Stanley, has raised concerns with Ford about the prospect of a breach of banking covenants.

Caffe Nero has said it does not expect breaching any of its covenants.

On Friday, Caffe Nero failed in a legal bid to have a challenge by landlords thrown out by the courts.

Landlords have challenged a radical restructuring to cut rents after it emerged that the Issas had lodged a late takeover bid.

Caffe Nero agreed a CVA with creditors last year, which gave its 650-plus landlords 30p for every pound they were owed.

The Issa brothers are currently funding a legal challenge to the CVA which is being pursued by one landlord after eight others agreed settlements.

On Friday, a judge ruled that the legal challenge will go ahead in July.

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  1. I think there should be tougher laws like there is for ordinary people borrowing large mortgages on these people loading these companies up with debt then sucking it out and sacking people which is what these two are doing at Asda and what Green did to Arcadia and BHS and what happened to Debenhams.

  2. I sense racist undertones with how the media treats these two businessmen from the UK

    Literally they put asda back in british hands and people want to bt ch about it and same with cafe nero

    Why shouldnt they be allowed to invest and get businesses without being villanified, finally some asians get some businesses from the big guys and everyones got their pants in a twist bunch of haters

    • Clearly you do not understand what defines racism or what Issa is attempting. CN is a family owned 30 year brittish brand. Issa ARE the big guys and are trying g to derail CN as they fight to reopen and rebuild–as are so many.

      The Issa brothers paid off and are now funding a legal challenge for ONE landlord (not half, not 100, not 10, not 2….ONE landlord). The others have ALL agreed to back CN to support their recovery.

      When Issa legal challenges began to fall apart, Issa then purchased debt, with the goal to bully CN into a sale by holding loan debt over their head or looking for mistakes/loopholes in loans.

      These guys are simply opportunists, looking for a cheap purchase and will dismantlethe brand to fit their needs as a petrol cup to go. It is their prerogative and this is business, but please do not make them out to be “the good guys” and please do not support their tactics.

      For the thousands of CN fans, stand up and support CN and your local cafes–do not allow the big guys to steamroll this great local brand!

  3. As I understand it Asda paid no tax for two years and the controlling company is based in Jersey, so maybe British but not much else to be proud of


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