Asda private equity owners grilled by MPs over lack of transparency and workers’ rights

As reported in the Retail Gazette, bosses at the private equity firm were called in front of MPs to examine whether or not there was a “debt bomb” forming under the UK high street because of the private equity business model. 

But TDR managing partner Gary Lindsay downplayed concerns over the £4.2bn of debt that the supermarket holds in a higher interest rate environment.

Lindsay said Asda was delivering real “economic value back to customers” and the supermarket had managed to reduce prices by nine per cent since its takeover.

“While it’s been great for the Asda business to enjoy a lower cost of capital for the last three or four years, that was never a central tenet of us investing in the business. We feel more than comfortable with the leverage level at Asda and we feel more than comfortable that when we decide to refinance the balance sheet in the next two or three years, the business can absorb the cost.”

Labour MP and the chair of the committee Liam Byrne pointed out that the majority of the the grocer’s entities were registered in Jersey, meaning that they could not access their accounts.

Although TDR Capital’s deputy general counsel Emma Gilks called Asda “extremely transparent”, Byrne questioned why Jersey was chosen to register some of the holding companies in the group.

TDR Capital admitted that the jurisdiction would provide more flexibility when it sold off the company and that there would be no stamp duty in the event of a sale

Although Lindsay also told MPs the group would commit to greater transparency following the feedback from the hearing.

He went on to tell MPs that it took its relationship with colleagues “extremely seriously,” noting it was “absolutely not” against workers being in a union.

His statement came as as Labour MP Ian Lavery quizzed TDR about its choice to not meet with GMB Union after the group tried to organise a meet with the business.

Staff at Asda’s Gosport Superstore were set to strike next week over “toxic” workplace practices, wage errors and health and safety concerns, however, it has been postponed to allow for last-ditch talks.

Nadine Houghton, GMB National Officer, said:

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

But workers on Asda’s shop floor deserve answers from private equity owners too, especially while Asda’s market share falls and debt levels remain worryingly high. Asda is part of our country’s national infrastructure. It is vitally important to get the full story from its bosses.”