Chilean retailer D&S is considering legal action to try to impede the sale of Santa Isabel, a subsidiary of Dutch retailer Ahold.
D&S’s complaint relates to money owed by Ahold concerning the Dutch group’s purchase of ten Argentine stores from D&S in 2000. D&S believes Ahold should pay back a US$90m debt related to the transaction, but Ahold has agreed only to pay the equivalent sum in the now significantly devalued Argentine peso currency. This would amount to just $46m.
In financial difficulties since it revealed earnings at its U.S. Foodservice had been grossly overstated, Ahold has been forced to seek buyers for its entire South American operation. A buyer has been found for the Santa Isabel supermarket chain in Chile, a subsidiary of Ahold’s Disco division, in the form of local player Cencosud, but D&S, Chile’s largest supermarket operator, believes Ahold is trying to reduce its ability to repay its debts to one creditor, in this case itself, in favour of others.
In retaliation, D&S plans to take Ahold to court to try to block the sale.
“A few days ago, we began (legal) actions but the counterpart has not yet been notified. There are parallel actions in several jurisdictions,” D&S lawyer Diego Peralta is quoted as saying by Reuters. He is referring to courts in Chile, Argentina and the Netherlands.
The deadline for Ahold to repay its debt to D&S is this coming Friday.