Terry Leahy: pay cut

Tesco is believed to be reconsidering the sale of six of its Irish properties which had been expected to net the supermarket giant more than €200m.

The company had been planning to sell two of its shopping centres – the Golden Island shopping centre in Athlone and the Artane Castle shopping centre – as well as four supermarkets in Dublin, Cork, Wicklow and Offaly. Tesco then planned to lease back the supermarkets at an agreed rent.

However, it is not now clear if the plan will go ahead. A spokesman for Tesco Ireland said the company is "considering its options" in relation to the six properties.

Tesco was hoping to raise more than €212m from the sale of the properties by targeting development companies attracted by the prospect of substantial rental income, as well as cash-rich private investors.

The sale of the Golden Island shopping centre alone, which extends over 20 acres and has the potential to raise €4m in rent annually, including almost €900,000 from Tesco, was expected to bring in more than €60m. Tesco bought Golden Island in 2005 for €52m.

The company's Clearwater supermarket in Dublin's Finglas came with an asking price of €40m with rent generated in the region of €2.7m. The Artane Castle shopping centre was valued at €35m. Supermarkets at Paul Street in Cork (€14m), Arklow (€31m) and Tullamore (€27.5m) were also up for grabs.

Tesco suffered a setback at the end of May when credit ratings agency Moody's downgraded its credit outlook from stable to negative on foot of concerns about its debt protection ratios. However, the company insisted that the move would not have any effect its ability to finance its operations.

The company is also facing increased competition in the British market, with rivals Sainsbury's, Morrisons and Asda all reporting much higher sales growth in the first half of the year, and it lost market share during that period.

Chief executive Terry Leahy's pay dropped by 7% this year to £5.1m (€5.8m) after difficulties in the company's US operations.

Tesco recently launched a campaign to lure Irish shoppers in the border counties back to its shops with lower pricing following an exodus to the North by consumers searching for better bargains.