CD&R Seeks to Raise Cash with First Deal in Over a Century

  • Morrisons’ parent company CD&R plans to sell and lease back five supermarket stores
  • Sale aims to raise cash amid uncertain economic conditions
  • Borrowing costs estimated at £95m, interest payments could rise from £35m to £335m
  • First deal since opening over 100 years ago
  • BNP Paribas property agents seeking buyers on behalf of the company
  • Stores come with 20-year leases and rent uplifts subject to inflation
  • CD&R won £7bn auction for supermarket last year, CMA approved in June 2022
  • Morrisons owns 86% of its 497 supermarkets, more than competitors

Morrisons’ parent company, Clayton, Dubilier & Rice (CD&R), is planning to sell and lease back five supermarket stores to raise cash amid uncertain economic conditions. This follows an announcement that the supermarket brand could face £95m in borrowing costs as its debt rises, with interest payments potentially increasing from £35m to £335m on top of its current £6.6bn debt total. If the deal goes through, it would be the first time Morrisons has undertaken such a move since opening over 100 years ago. BNP Paribas property agents are currently seeking buyers on behalf of CD&R for the stores, which come with 20-year leases and rent uplifts subject to inflation. CD&R won a £7bn auction for the supermarket last year, with the Competition and Markets Authority approving the deal in June 2022. CD&R stated that the ‘mooted store’ disposals only represent 1% of Morrisons’ supermarket portfolio.

Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about the potential sale of five Morrisons stores by CD&R, the company’s current debt situation, and the involvement of BNP Paribas property agents in finding buyers. It also mentions that the stores will come with 20-year leases and rent uplifts subject to inflation, as well as the size of Morrisons’ supermarket portfolio compared to its competitors. The article does not include any digressions, sensationalism, redundancy, opinion masquerading as fact, or invalid arguments.
Noise Level: 3
Noise Justification: The article provides relevant information about the potential sale and leaseback of some Morrisons stores by CD&R in response to economic uncertainty and rising debt. However, it lacks analysis or exploration of long-term trends or consequences for stakeholders.
Financial Relevance: Yes
Financial Markets Impacted: Morrisons’ debt and potential sale of stores may impact the company’s financial performance and stock price
Financial Rating Justification: The article discusses Morrisons’ efforts to raise cash due to economic uncertainty, its rising borrowing costs, and plans to sell stores, which could affect the company’s financial situation and potentially impact financial markets through changes in its debt and stock value.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: There is no extreme event mentioned in the text.

Reported publicly: www.retailsector.co.uk