Michelle ThompsonBillionaire Issa brothers borrowed $7 million from EG Group in 2022 to settle debt incurred to buy jets.
According to reports, the billionaire brothers who operate the Asda supermarket chain borrowed millions of pounds from their petrol forecourt company to settle debts incurred in the purchase of two private jets.
According to corporate papers, Mohsin and Zuber Issa, who acquired Asda in 2020, used their EG Group, which operates thousands of gas stations in the UK and abroad, to lend $7 million (£5.6 million) to two private jet firms they owned in 2022.
According to the Financial Times, more than $5 million (£4 million) was given to one Issa-owned business, which controls a Bombardier Global 6000 plane, while the remaining $2 million (£1.6 million) went to another of their companies, which owns a smaller Bombardier aircraft. Both businesses are registered on the Isle of Man.
Last year, it was alleged that EG Group gave the companies a €39 million (£33 million) unsecured credit to buy back the jets in 2018.
In recent months, politicians have questioned the two brothers’ debt-laden takeover of Asda, raising concerns about its ownership structure.
In a £6.8 billion agreement, the brothers and private equity firm TDR capital acquired Asda in 2020.
However, the brothers invested only £100 million of their own money, coupled with £100 million from TDR Capital. According to Bloomberg, the remaining funds were raised through the largest pound corporate bond sale on record, as well as a loan from EG Group’s parent firm.
In September, Darren Jones, the then-chair of parliament’s business and trade select committee, inquired into the retailer’s corporate structure, capital investment, and petrol profit margins.
He also demanded additional information about the EG Group’s loans for the Issa brothers’ plane purchases.
In 2018, EG Group gave the private jet firms €39 million in unsecured, interest-free loans to purchase the jets. The aviation firms also borrowed money from Bank of America, which has security over the two jets.
According to the Financial Times, the $7 million in fresh loans issued in 2022 would cover all but $1 million of the interest repayments EG claimed receiving from the two companies that year. However, a source informed the paper that the funds were used to pay interest and principal (the initial amount borrowed in a loan) on third-party debt.
According to the EG Group, “As previously disclosed to the Financial Times in 2022, loans to the [Isle of Man] companies are fully disclosed in the EG Group accounts and continue to be so.”These loans were made at rates comparable to the typical commercial rate of interest. The interest has been identified and included in EG Group’s financing income.”
According to a source, the loans were supposed to be fully repaid by November.
Earlier this month, Mohsin Issa acknowledged his relationship with Victoria Price, a former EY tax colleague. She quit shortly after the firm resigned as Asda’s auditor in July of last year.
The Telegraph also claimed lately that Zuber Issa, who owns 22.5% of the supermarket, was considering selling his shares and focusing on the fuel forecourt business.
