Blackburn's billionaire Issa brothers have had their EG Group's credit rating downgraded, despite a record quarter of profitability.

Investors service, Moody's, moved the EG Group from a B2 rating to a B3 rating, over concerns in the way it was reporting its £8bn debt, as well as issues over the resignation of the company's auditors, Deloitte.

A spokesperson for EG Group said: “We strongly disagree with Moody’s decision which, despite recognition of EG’s inherent strengths and progress on several fronts, we believe doesn’t reflect the continued, wide-ranging investment in strengthening the business and the significant progress made over the last 12 months.

"EG has recently reported a record quarter of profitability, despite the external backdrop - so the business is performing exceptionally strongly.

"We look forward to providing our investors with a further update on that progress, along with our record third quarter performance, next month.”

Lancashire Telegraph:

Deloitte resigned from their position as auditors for the company two weeks ago and were swiftly replaced by KPMG.

It was rumoured the departure was in part down to disagreements, however EG Group has denied this due to the fact Deloitte still continue as auditors for the Group's Australian business.

As a result of the recent changes, EG Group has acknowledged that expanding the group's board composition to include independent directors and a chairman could be delayed.

In contrast to Moody’s position, S&P (Standard & Poor's 500 Index) last week maintained its rating for EG Group, noting positive performance.

A spokesperson for S&P said: "EG Group's positive year-to-date performance provides breathing room to service debt but leverage remains high.

"As such, our ratings and outlook on EG Group are unchanged.

"We expect that the group's diversified operations, substantial contribution from convenience stores, very high fuel margins, and cost-saving and cash preservation initiatives in 2020 should enable it to post earnings growth in the next 12 months.

Lancashire Telegraph:

"However, while this will speed up leverage reduction, we note that the group is still burdened by a highly leveraged capital structure, with adjusted debt estimated to reach about $11 billion.

"We project that EG Group will reduce its S&P Global Ratings-adjusted debt-to-EBITDA ratio and we also expect the group to generate sufficient cash flow to cover mandatory debt amortization and cash interest payments while maintaining adequate liquidity.

"During the recent results call, management stressed that a bid for U.K. supermarket chain ASDA by EG Group's founders and TDR Capital would be financed separately from the group.

"Therefore it does not affect our view of EG Group's creditworthiness."

S&P Global Ratings said they will continue to monitor the situation to ascertain that the group continues to comply with management and governance standards.