Chilean retailer D&S has announced that its has started legal proceedings against beleaguered Dutch retail giant Royal Ahold, regarding claims that Ahold’s Argentine subsidiary Disco owes D&S US$45m.
D&S said the Dutch retailer missed Wednesday morning’s deadline to repay the full $90m D&S says it is owed by Disco.
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 $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 US 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, is trying to block the sale as it believes Ahold is trying to reduce its ability to repay its debts to one creditor, in this case itself, in favour of others.