Belgian retail group Delhaize has announced its decision to divest its loss-making subsidiary, Food Lion Thailand, through the sale and closure of its 26 stores.

Delhaize said the divestment was in line with its strategy to focus the group’s resources on markets where Delhaize has or can obtain a strong local presence.

Delhaize is in an advanced stage of negotiations on the possible sale of a significant number of stores. Any store not sold will be closed.

As a result, Delhaize said it expects to record an exceptional charge of between €12m and €16m (US$19.2m) after tax in the third quarter of 2004. In 2003, Food Lion Thailand contributed €54.5m to Delhaize’s sales and reported a net loss of €10.5m.