Beleaguered Dutch supermarkets group Laurus revealed earlier today [Thursday] that it has signed a letter of intent to sell its loss-making Spanish division to UK venture capitalist group CVC Capital Partners Ltd.
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A sale of the retail operations, which comprise around 670 El Arbol shops and cash and carry stores, has been long expected as Laurus struggles to return to profitability. The Spanish shops have merely added to the debt burden of the Netherlands’ second largest retailer, which was only saved from collapse by a crucial cash injection by French retailer Casino earlier this year.
Laurus explained: “During the last years, the weak performance and continuing losses of the Spanish operations resulted in an increased indebtedness and a continuous deterioration of the equity of Laurus. Divesting the Spanish operations is therefore a significant step towards the restructuring of Laurus as a whole.”
A Laurus spokeswoman told Reuters it will not receive any money from the sale, but could later convert an unsecured loan into equity. Laurus and CVC will both inject new funds into El Arbol to refinance debt and provide liquidity. Laurus is expected to register a negative equity impact of €65m.
The sale is expected to be completed around the middle of October.
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By GlobalData
