TDR Capital to face MP questions over Asda deal

British private investment firm TDR Capital will face questions from MPs next week about its joint buyout of Asda.

Asda was bought from Walmart by the Issa brothers alongside TDR Capital in February 2021.

The move follows an evidence session held by the Business and Trade Committee before Christmas which examined the use of private equity in the retail sector and was attended by Asda co-owner Mohsin Issa.

The Committee has warned that private equity structures, which allow for greater control over businesses by using debt financing to buy them outright, are risky given that interest rate hikes have often left companies acquired this way with a heavy debt burden.

At the time of the December meeting with Issa, workers trade union GMB criticised the fact that TDR Capital had not been called to speak on the issue, describing the company as a “shadowy” private equity firm that should not be allowed to avoid scrutiny given its participation in the purchase of the supermarket chain.

TDR Capital is now set to attend a similar meeting on Tuesday, where it will be questioned about the trade-offs of high-debt leveraged buyouts and the impact on working conditions.

The company will also be asked about the rationale and consequences of Asda’s acquisition of EG Group UK and Ireland operations, as well as the future implications for private equity following rises in interest rates over the last two years.

“It’s right that MPs will finally get the chance to hold TDR Capital to account on their co-ownership of Asda," said Nadine Houghton, GMB national officer. “Too often shadowy private equity bosses are able to dodge scrutiny and do their dealings behind closed doors."

Houghton said that Asda workers "deserve answers from private equity owners too", suggesting that the retailer's market share is falling and that debt levels remain "worryingly high".

TDR Capital declined to comment.

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