The petrol stations giant founded by two of Britain’s most successful sibling-entrepreneurs is about to take a big step towards addressing doubts about its corporate governance by naming a slate of independent board members.
Sky News has learnt that John Carey, a former BP executive, is in advanced talks to join EG Group as a non-executive director.
An announcement could be made as soon as next week, according to one insider.
City sources said on Friday that EG is lining up another heavyweight independent director to serve as chair of the company’s audit committee, while the recruitment of a non-executive chairman is also under way.
The appointment of Mr Carey, who also worked for the Abu Dhabi national oil company Adnoc Distribution as its deputy chief executive, will come as EG Group’s founders, Mohsin and Zuber Issa, prepare to complete their most prominent takeover to date: the £6.8bn purchase of Asda.
The billionaire brothers are acquiring the supermarket giant alongside TDR Capital, the private equity firm which has been a major shareholder in EG Group since 2015.
Together, the shareholders have built EG into one of the world’s largest operators of petrol forecourts, with operations in ten countries and 44,000 employees.
The company is acknowledged in the industry as a pioneer in its approach to branded convenience retailing at its sites, a strategy which has generated industry-leading returns.
The scale of the business represents a remarkable achievement for the Issas, who launched it with a single petrol station in Lancashire in 2001.
Their acquisition of Asda was hailed by the chancellor, Rishi Sunak, as a welcome return for the grocer to majority UK ownership, while the brothers were awarded CBEs earlier this year for their service to business and charity.
EG has expanded steadily through a string of debt-led acquisitions, and now operates approximately 6,000 sites, serving 23 million customers every week.
The Issas’ meteoric rise has not been without scrutiny, particularly in recent weeks since the announcement that they and TDR had clinched the Asda deal.
Last week, it emerged that Deloitte was stepping down as EG’s auditor, and would be replaced by KPMG, its fellow big four accountancy firm.
Reports said that Deloitte had resigned because of concerns about corporate governance, although one insider said that a desire expressed by the audit firm last year to see independent non-executives appointed to EG’s board had been framed in the context of a future stock market flotation.
TDR and EG are now working towards such an event, potentially as soon as next year.
The fees paid to Deloitte are understood to have been as significant a source of contention as governance issues, the insider added.
Reports about the auditor’s exit and a downgrade by the credit ratings agency Moody’s – the basis for which was disputed by the company – have hit the price of EG’s bonds in recent weeks, but many investors believe the concerns have been exaggerated.
Quarterly results published earlier this month showed a record performance for EG in terms of earnings before interest, tax, depreciation and amortisation.
Mohsin Issa, the co-founder and co-chief executive, said alongside the results: “To deliver such a strong performance in the third quarter, resulting in a record quarter of profitability for the Group, is testament to the resilience and differentiation of our best-in-class, diversified business model.
“Looking ahead, while the impact of tightening lockdown restrictions in a number of markets is yet to be fully seen, EG Group is strongly positioned to weather these external challenges and continue driving long-term growth across our global business.”
EG declined to comment on the prospective appointment of Mr Carey.