Tesco in £4bn sale of South Korea stores
Homeplus, Tesco's South Korean business, has been sold for £4.2bn, the UK's biggest supermarket chain and world's third largest retailer has announced.
With continued aggressive competition in the UK supermarket sector, the sale is aimed at paying down debt and shoring up the balance sheet.
A South Korean buyout firm set up only a decade ago, MBK Partners, had made the purchase in partnership with Singapore's Temasek Holdings and a Canadian pension fund.
The sale, which is expected to be completed before the end of the year, will net Tesco £3.35bn after tax and other costs have been deducted.
Chief executive of Tesco, Dave Lewis, said: "This sale realises material value for shareholders and allows us to make significant progress on our strategic priority of protecting and strengthening our balance sheet."
Lewis was appointed as chief executive to replace Philip Clarke in July 2014 and took up the reins in October of last year.
The change came after the company admitted misstating profits by £250m, although that figure rose to £263m a month later.
Tesco reported a record pre-tax loss of £6.4bn for the 12 months to February this year, compared with an annual pre-tax profit of £2.26bn the year before. The loss was one of the biggest ever in UK corporate history and the largest reported by a UK retailer.
Competition from Aldi and Lidl has had a significant impact on the big four supermarket chains, which have also been hit by shoppers moving away from doing one big weekly shop at superstores and using high street convenience outlets more.