Tesco sells Korean arm to cut debt pile

Supermarket giant Tesco has agreed to sell its Homeplus operation in South Korea to a group of investors for £4 billion in cash.

Tesco is selling its South Korean arm

The retailer said the disposal, expected to complete in the final three months of the year subject to shareholder and regulatory approval, would lead to a “significant reduction” in its £4.2bn debt pile.

Tesco’s business in Korea is its biggest outside the UK, with more than 400 stores, 500 franchise outlets and six million customers served every week.

Chief executive 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.”

Homeplus is being bought by a consortium led by MBK Partners and including Canada Pension Plan Investment Board, Public Sector Pension Investment Board and Temasek Holdings.