Co-op to Sell Pharmacies and Farms on Capital Black Hole and Paul Flowers Scandal
The Co-operative group has sold its farms to reduce its debt.Co-op

Crisis hit Co-operative Group has agreed to sell its farms to charity Wellcome Trust in a deal worth a quarter of a billion pounds.

The transaction from Co-op to the charity, worth £249m (€312m, $419m), will allow the troubled company to focus more on its core retail and consumer services, according to a statement, whilst going someway to reducing its massive debt.

Over 39,000 acres in 15 farms, including three pack houses and 100 residential and 27 commercial properties have been transferred to Wellcome Trust, as well as all the farms' employees.

"The successful sale of our Farms business is another important development for The Co-operative Group," said Richard Pennycook, interim group chief executive for the Co-op.

"The sale proceeds will enable us to further reduce our debt and progress with the delivery of the clear strategic plans we have in place for our core retail and consumer services' divisions."

Danny Truell, chief investment officer for the Wellcome Trust, added: "The Wellcome Trust has a strong track record as a long-term investor which values responsible stewardship over quick profits, with extensive and successful interests in UK property and farmland.

"We believe that we are ideally placed to develop and grow The Co-operative Group's farms and farm business while providing continuity, and are delighted to have acquired them in what will be one of the largest global deals of its kind."

The Wellcome Trust, which was established to improve human and animal health, is one of best endowed charities in the world with a £16.4bn investment portfolio, funding operations and initiatives around the globe.

The sale of the Co-op's farms comes just weeks after the beleaguered firm confirmed that it will sell its entire pharmacy chain to Bestway, the privately-owned UK cash and carry operator.

It agreed to sell all 774 pharmacy stores for £620m in a bid to wipe off some of its £1.4bn of debt.

The pharmacy transaction is due to be finalised in October; some 6500 staff will be affected by the switch.