According to information obtained by News, the grocery store with private equity backing has reached an enormous ground rent agreement with real estate investor Song Capital.
According to the agreement, which might be revealed on Thursday along with Morrisons’ quarterly results,
For the next 45 years, Song Capital will spend £370 million to acquire the right to collect a revenue stream from 75 of the chain’s supermarkets.
Since then, Morrisons has faced significant challenges as bargain retailers Aldi and Lidl have grown in popularity and Tesco, the market leader, has recovered.
In an effort to halt its downturn, the company appointed veteran Carrefour executive Rami Baitieh as its new CEO last year.
Morrisons’ profitability has improved since his hiring, and the company’s net debt has decreased from a height of £6.2 billion to approximately £4 billion.
In the fiercely fought campaign to acquire the grocery chain, CD&R promised to refrain from making large-scale shop freehold disposals for a set amount of time.
The agreement with Song Capital was made after that commitment expired, but it does not, in any event, result in a transfer of title to the properties in question.Morrisons will continue to maintain the freehold to the stores.
The purchase was made more than three years after Clayton Dubilier & Rice (CD&R) took the Bradford-based retailer private in a deal that was estimated to be worth around £10 billion including debt.
