Tesco pays up to exit US Fresh & Easy business

11th Sep 2013 08:07

Tesco has agreed to give away the bulk of its US business, Fresh & Easy, to billionaire Ron Burkle and will pay further 150m pounds in loans and costs. A specialist in reviving supermarket chains, Burkle has agreed to take more than 150 stores and a distribution centre from the UK company via his Yucaipa investment company.Tesco will receive nothing for the deal but will pay a secured loan of £80m, enabling it to exit its badly lossmaking Stateside foray. Tesco announced, after the London trading hours on Tuesday, that it expected the total cash outflow relating to the closure of the remaining stores, other expenses and the loan would be no more than £150m. The FTSE 100 company added that it expected to complete the sale process within three months, following which there will be "no ongoing financial exposure for Tesco" in the US.Tesco Chief Executive Officer Philip Clarke said: "The decision we are announcing today represents the best outcome for Tesco shareholders and Fresh & Easy's stakeholders. "It offers us an orderly and efficient exit from the US market, while protecting the jobs of more than 4,000 colleagues at Fresh & Easy."Shares in Tesco were up 0.3% to 373.20p by 08:04 on Wednesday.