Tesco PLC Tesco agrees sale of business in Poland
RNS Number : 2990Q
18 June 2020
Tesco PLC ("Tesco")
18 June 2020
Tesco agrees sale of business in Poland
Tesco today announces the sale of its business in Poland to
Salling Group A/S. The transaction, which is subject to antitrust
approval, includes the sale of 301 stores together with the
associated distribution centres and head office.
Commenting on the sale, Dave Lewis, Chief Executive of Tesco,
"We have seen significant progress in our business in Central
Europe, but continue to see market challenges in Poland. Today's
announcement allows us to focus in the region on our business in
Czech Republic, Hungary and Slovakia, where we have stronger market
positions with good growth prospects and achieve margins, cashflows
and returns which are accretive to the Group.
I would like to thank all of our Tesco Poland colleagues for
their dedication to serving customers in Poland over many years.
The energy and commitment they have shown over the past two years
transforming Tesco Poland to a two-format business has been
incredibly impressive. We see this transaction as the best way to
secure the future of the business for our colleagues and customers
Total enterprise value agreed for the transaction is PLN 900m
(equivalent to GBP181m), with total net proceeds expected to be
approximately PLN 819m (equivalent to GBP165m), settled in cash,
with completion expected in the current financial year. Proceeds
from the sale will be used for general corporate purposes.
In addition, the Group has made good progress in selling its
remaining Polish property outside of this transaction. Over the
past 18 months, the Group has either sold or agreed to sell 22
stores for net proceeds of c.GBP200m. The Group will continue to
seek to realise value from the remaining assets, which include 19
currently trading stores not covered in this transaction.
-- Salling Group A/S is 100% owned by the Salling Foundations
from Denmark and serves 11 million customers every week across
Germany, Poland and Denmark, with 50,000 colleagues and an annual
turnover of approximately GBP 7bn.
-- Tesco Polska generated sales exc. VAT and PFS of GBP1,368m
and an operating loss before exceptional items of GBP(24)m in the
2019/20 financial year.
-- In the 2019/20 financial year, the 301 stores in Poland being
sold generated sales exc. VAT and PFS of GBP947m and a loss before
tax of GBP(107)m including exceptional items (principally
restructuring and impairment costs).
-- The 301 stores in Poland being sold had gross assets of
GBP681m at the end of the 2019/20 financial year.
-- All 301 stores included in the transaction will be rebranded
during an 18-month transition period.
-- Figures presented in GBP use the following exchange rates:
PLN4.926:GBP1.00 (19/20 YTD Average FX) for P&L items,
PLN5.034:GBP1.00 (19/20 Closing FX) for Balance Sheet items and
PLN4.962:GBP1.00 based on the 5 day average of daily mid-point
rates for the transaction terms.
Investor Relations Chris Griffith +44 (0) 1707 940 900
Media Simon Rew +44 (0) 330 6780 639
Philip Gawith (Teneo) +44 (0) 207 420 3143
Barclays Bank PLC, acting through
its Investment Bank
(Sole Financial Adviser and Corporate
Broker) +44 (0) 20 7623 2323
Important notices relating to financial advisers
Barclays Bank PLC, acting through its Investment Bank
("Barclays"), which is authorised by the Prudential Regulation
Authority and regulated in the United Kingdom by the Financial
Conduct Authority and the Prudential Regulation Authority, is
acting exclusively for Tesco and no one else in connection with the
matters described herein and will not be responsible to anyone
other than Tesco for providing the protections afforded to clients
of Barclays nor for providing advice in relation to the matters
described herein or any other matter referred to in this
LEI Number: 2138002P5RNKC5W2JZ46
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