A modern rags-to-riches story:
Two brothers from Blackburn whose parents came to Britain “with nothing” stand to gain a £5bn fortune by floating their petrol station empire.
Mohsin and Zuber Issa, 48 and 47, opened their first forecourt in Bury in 2001 and have since transformed their company EG Group into a global behemoth with 4,700 sites in the US and Europe.
The firm is now exploring a stock market float which could see it valued at £10bn – and between them the brothers own half the business, putting them in line to control a £5bn stake.
Do they have any advice for anyone wanting to follow in their footsteps?
Speaking earlier this year, Zuber said: “Education is the only way to get people out of poverty. “Our parents came to the UK in the 1960s with nothing. This is our way of saying ‘thank you’ because the UK has provided us with a fantastic opportunity to build our business.”
Actually, their story makes it sound like buying petrol stations is the way to prosperity, not education.
One has to ask, though, can you really make this much money from garages in such a short space of time? Especially in an industry noted for its incredibly tight margins? And when you’re competing against global giants like Shell and BP? Or is this just another debt-fuelled disaster waiting to happen? Are they selling out just as it’s all about to decline?
The Issas – who already boast a combined net worth of £1.2bn – own EG alongside private equity giant TDR Capital …
Armed with TDR’s support it has been on a period of ultra-rapid expansion, tripling site numbers last year and adding an extra 1,000 locations so far in 2019.
Don’t tell me that had the cash to open these themselves. Clearly it’s ‘TDR Capital’ that’s providing the money.
In February 2018, it was announced that Euro Garages would acquired 762 convenience stores in the United States from Kroger.
What’s the bet this is TDR Capital again stumping up the money?
EG Group is the largest independent petrol station operator and employs around 25,000 people and earns annual revenues of more than $20bn (£15.8bn).
But when it comes to selling petrol, revenues are what potential investors will be looking at, because this is a high revenue-low margin business, and most likely huge debts to service.
I don’t claim to be an expert on this sort of thing but I wouldn’t be foolish enough to put my money into this. Especially when you consider that TDR Capital were part of the Gondala Group who managed to offload Pizza Express onto a bunch of Chinese suckers for £900 million in 2014. (I don’t know if they were still part of Gondala in 2014, but even if not, I suspect they learned from them.)
Despite generating bigger revenues than engineering titan Dyson or gambling firm Bet365, whose boss Denise Coates was paid £265 in 2017, the Issa brothers declined to pay themselves a dividend during 2018.
The boss of Bet365 was paid £265 in 2017? Are there any subs left at the Telegraph any more?