Tesco has sold its South Korean Homeplus stores, for £4.2 billion ($6.7 billion) as the troubled supermarket chain seeks to shore up its balance sheet.

The proceeds will be used to pay down debt and help revitalize Tesco’s UK business.

Tesco is the UK’s biggest supermarket chain and the world’s third largest retailer after Wal-Mart and Carrefour.

Homeplus is being bought by MBK Partners, a South Korean buyout company set up a decade ago.

It has partnered with a Canadian pension fund and Singapore’s Temasek Holdings for the deal.

Dave Lewis, chief executive of Tesco, said: “This sale realizes material value for shareholders and allows us to make significant progress on our strategic priority of protecting and strengthening our balance sheet.”

After tax and other costs the sale will produce £3.35 billion ($5.6 billion) in cash for Tesco and is expected to be completed before the end of the year.

The Homeplus deal is the first major disposal since Tesco reported a record pre-tax loss of $10.2 billion for the year to February.

That compared with annual pre-tax profit of $3.36 billion a year earlier.

It was the biggest loss reported by a UK retailer and one of the largest in the country’s corporate history.

Tesco has faced challenges on several fronts in recent years.

Hard discounters such as Aldi and Lidl have been eroding the market share of the big four supermarket chains, while Tesco has struggled with excess floor space in out-of-town superstores.

Shoppers have moved away from doing one big weekly shop at such stores in favor of topping up more frequently from high street convenience stores.

Homeplus has 140 hypermarkets, 375 supermarkets and 327 convenience stores.

The MBK Partners consortium said it planned to invest 1 trillion won ($874 million) in Homeplus over the next two years to increase its competitiveness.