Lancashire's billionaire brothers have swooped in to buy fast food chain Leon with their sights firmly set on taking over Caffe Nero.

New reports have suggested that Blackburn's Mohsin and Zuber Issa - who created their fortunes through the EG Group - are close to an agreement for the coffee house chain after taking on its debt.

According to the Sunday Telegraph, the Issa brothers took on roughly £140million of loans from Partners Group; a Swiss private equity firm via investment bank Morgan Stanley.

This has put them in a strong position to take over the reins at the high street cafe chain which has around 900 UK stores and thousands of members of staff.

The business would have to default on its borrowing for this to happen, BusinessLive reports.

Partners Group wrote to Caffe Nero's chief executive Gerry Ford last week to raise various concerns about the state of its finances, sources told the paper.

The Sunday papers also reported that the chain risks breaching its banking covenants - and it may not be able to refinance £145m of debts that are due to be repaid in 2022.

Last November, Caffee Nero was placed into a Company Voluntary Arrangement as it looked to get its finances in order.

The struggling business rejected the bid from the brothers, although that remains the subject of a possible legal challenge

A statement from Caffe Nero said: "We have had a successful winter and spring trading and are generating positive cash flow and are ahead of forecast for the last five months.

"We are forecasting no covenant issues in our projections over the next 12 months and we look forward to an even brighter future post May 17 when we open up our cafes fully to the public.”

The Mail on Sunday reported that the brothers have taken over fast food chain Leon in a £100million deal.

The company has more than 70 restaurants mainly in the London area.

A statement from EG Group said: “EG Group continues to identify innovative partnerships and acquisitions that complement our existing consumer offer and enable us to stay at the forefront of consumer trends, particularly in foodservice,” the Issa brothers said.

“Our equity investment in Leon is to strengthen our own participation in the fast-growing contemporary foodservice segment.

“This acquisition aligns with our commitment to being a committed foodservice operator globally, delivers financial benefit to our underlying business, and supports broader commercial strategies to be able to better realise further growth opportunities.”

Back home in Blackburn, the Asda owning Issa brothers are currently in the process of building a £5million mosque in the town that they want to be a cultural melting pot for people from every corner of society.

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