Tesco has agreed to sell its South Korean business Homeplus to MBK Partners-led consortium for $6.1bn (£4bn).

As per the terms of the transaction, Tesco will secure $6.1bn (£4bn) in cash. After adjustments for tax and transaction costs, the retail firm will gain net cash proceeds of around $5.07bn (£3.35bn).

The proceeds derived from the sale will be utilized by Tesco to revitalize its domestic business.

Currently, Tesco’s debt is a whopping £17bn, including pension liabilities, reported The BBC. Therefore, it requires the money to reduce the debt.

The MBK Partners consortium includes Canada Pension Plan Investment Board, Public Sector Pension Investment Board and Temasek Holdings.

This April, the retail chain reported significant loss never witnessed in its almost 100 years history. It has debts of $33.2bn and has been exploring the option to sell its businesses.

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By GlobalData

Once completed, the transaction would give MBK group a discount store chain that is reputed second only to E-Mart in South Korea.

Tesco has 700 stores, which generate revenue over $7bn.