Tesco Plc agreed Monday to sell its South Korean operations to a group led by private-equity firm MBK Partners for 4 billion pounds ($6.1billion), the British retailer said in a statement. Tesco said that the sale of its Homeplus business in South Korea would help reduce the high debts on its books.

The transaction, which is subject to regulatory and shareholder approvals, will be Asia’s biggest-ever leveraged buyout deal and would help reduce Tesco's debt by 4.23 billion pounds, Bloomberg reported.

The group led by MBK Partners includes Canada Pension Plan Investment Board, Public Sector Pension Investment Board and Temasek Holdings (Private) Ltd. and the sale indicates Tesco Chief Executive Dave Lewis’ efforts to turn around the retailer’s struggling business. MBK Partners is the largest private equity firm in South Korea and has over $8.2 billion in capital under management.

"This sale realises material value for shareholders and allows us to make significant progress on our strategic priority of protecting and strengthening our balance sheet," Lewis said in the statement.

Tesco said that it will use proceeds from the sale to pay off debts, which amount to about 21.7 billion pounds, over the next 18 months. The company also said that it will be able to consider investment options like the “selective” buying of properties that it gives for lease in the U.K. Tesco expects to note 150 million pounds as loss from the sale, according to Bloomberg.

“Completing this disposal is very positive for Tesco’s balance sheet,” David Payne, an analyst at Nomura, told Bloomberg, adding: “Investors have been getting more nervous about a possible rights issue at Tesco.”

Tesco entered the South Korean market in 1999 and had announced an investment of 130 million pounds through a joint venture with the Samsung Group. Tesco initially held an 81 percent stake in the venture and bought out Samsung’s stake in stages.

However, Homeplus’ same-store sales have been falling since 2011, dropping 4 percent last year, Bloomberg reported. The brand, however, recorded a net loss of 300.1 billion won ($255 million) in the year ended Feb. 28, compared to a profit of 463 billion won the last year.

Meanwhile, the parent company has been facing an increasing challenge to boost sales in the U.K. amid a price war from discount stores like Aldo and Lidl. In January, Lewis announced the shutting down of 43 stores while the company posted its biggest-ever loss of 6.4 billion pounds in April.

"(The) price looks OK," a major Tesco shareholder said, according to Reuters, referring to the latest deal, adding: "I suspect that despite the earnings dilution the market will take a positive view of the deal as it strengthens the balance sheet."