Shares in troubled supermarket group Tesco tumbled almost 1% in early trading on Monday after the group announced it was selling its South Korean division Homeplus.
The business is being bought by South Korean firm MBK Partners for £4.2bn and Tesco said the proceeds of the sale will be used to bolster the its balance sheet.
In April this year, Tesco reported a pre-tax loss of £6.4bn for 12 months to February, representing the steepest ever loss for a UK retailer.
This marks the first major move by the business since the market update.
In a statement, Dave Lewis, chief executive of Tesco, said: “After a highly competitive process, we are announcing today the proposed sale of Homeplus, our business in the Republic of Korea. 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.
“I would like to thank all of our Homeplus colleagues for their dedication, professionalism and service to our customers, which has resulted in the creation of a great business. I am confident that the agreement we have reached with MBK Partners presents an exciting opportunity for their continued success.”
By 09:14, Tesco’s shares were off by 0.54% or 184.95.
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