Troubled Dutch retail Giant Royal Ahold today announced it has reached an agreement for the sale of its Malaysian activities, operating under the name of TOPS Retail, to Dairy Farm Giant Retail, a subsidiary of Dairy Farm International Holdings.
The transaction – an asset purchase agreement – is expected to be finalised in the third quarter of 2003. The transaction sum was not disclosed. The divestment of Ahold’s activities in Malaysia is part of the retailer’s strategic plan to restructure its portfolio to focus on high-performing businesses and to concentrate on its mature and most stable markets.
Hong Kong-based Dairy Farm is listed on the London Stock Exchange and owns a range of food retailers in several Asian markets.
Under the deal, Dairy Farm will acquire 34 stores and one grocery distribution centre from Ahold. The actual transfer of the stores and distribution centre will take place following regulatory approvals in Malaysia and the satisfaction of other customary conditions. Store and distribution centre associates will be transferred to Giant. Ahold’s Malaysian headquarters staff and assets are not included in the transaction, although Ahold is committed to meeting its obligations to these associates.
Ahold entered the Malaysian market in 1996 through a 60-40 joint venture with Perlis Plantations, a subsidiary of the Kuok Group, and opened its first two stores in October of that year. Ahold’s Malaysian operation became a wholly-owned subsidiary in December 2000. Unaudited net sales in 2002 amounted to approximately €85m (US$95.4m). Ahold employs approximately 1,750 people in Malaysia.
Ahold has also confirmed its is extending its US Foodservice securitisation programmes. The programmes currently have US$750m outstanding, of which $300m matures in 2005.
Ahold has now announced that it has extended the remaining $450m of the securitisation programmes for an additional 60 days. Of the $450m capacity, $200m will amortise over this period of 60 days.
The remaining $250m capacity will remain available to Ahold as necessary for further support of the US Foodservice securitisation programmes.
The retailer also announced that Deloitte & Touche has resumed the audit at Ahold units Albert Heijn and Stop & Shop. The delivery of audited 2002 financial statements for Albert Heijn and Stop & Shop by 31 May is a condition precedent governing the availability of the second, unsecured tranche of $915m of the €3.1bn credit facility previously announced by Ahold. At this time, only the audits at Albert Heijn and Stop & Shop have resumed.