Asda Faces Financial Pressure Ahead of Walmart Repayment

Asda is facing significant financial challenges, with a looming £900 million repayment to its former owner Walmart due by 2028, which includes £500 million for Walmart's remaining stake and £400 million in interest. Credit rating agency Fitch has warned that this repayment may necessitate a restructuring of Asda's capital, as the supermarket's debt currently sits around £6 billion. Since its acquisition by private equity owners TDR Capital and the Issa brothers in a £6.8 billion deal, Asda's market share has dropped from 14.8% to 12.5%, with criticism directed at cost-cutting measures impacting customer experience. New chairman Allan Leighton has committed to reversing the sales decline over the next three to four years but may face difficulties due to the substantial investment needed, potentially exceeding £1 billion. Asda's spokesperson maintains that the business is cash-generative and has reduced its leverage, yet industry observers remain skeptical of its financial stability. An emergency £30 million injection from TDR Capital and Mohsin Issa in August highlights the urgency of addressing these financial issues.