UK retailer Woolworths has reached an agreement to dispose of the leases of up to nine stores to Tesco for a consideration of around GBP9m (US$15.5m).

The group said the transfer of individual leases are subject to individual conditions and are be expected to occur on a lease-by-lease basis over the next six months.

The proceeds from the disposal, which will be received in cash at completion, will be used to reduce group borrowings, Woolworths said on Friday (10 October).

Assuming all nine leases are transferred this would generate a profit of approximately GBP7m which will be disclosed as part of the operating profit from property transactions, their net asset value being approximately GBP1m.