To pare debt, Ahold will sell cut-rate shares
Nov 26, 2003 12:00 PM, from staff and wire reports
Netherlands-based Royal Ahold recorded third-quarter earnings below expectations, and to trim debt, the world's third-largest supermarket operator plans to sell euro3 billion ($3.5 billion) in new shares at a steep discount.Ahold, still beset by an accounting scandal, registered a third-quarter net loss of euro122 million ($144 million), in contrast with a profit of euro159 million a year earlier. Sales dropped 7.1% to euro13.1 billion ($15.5 billion).
The company will offer 621 million new common shares at euro4.83, a 42% discount from the euro8.27 ($9.76) closing price of European shares November 25. Shareholders of record can purchase two new shares for every three they own. New shares are to be listed December 17.
Earlier in 2003, Ahold confessed to overstating earnings by more than euro1 billion in 2000Ð2002, largely because of inflated sales at its US Foodservice subsidiary.
US and Dutch regulators began probing the firm's accounting practices. In October, Ahold posted correct, audited books for 2002, showing a loss of euro4.33 billion ($5.1 billion).
In other news, Wal-Mart Stores Inc reportedly is near an agreement to acquire Bompreco, Brazil's third-biggest retailer, from Ahold. Wal-Mart is attempting to overcome a court injunction barring Ahold from also selling its smaller G Barbosa Comercial supermarket chain to Wal-Mart, according to a source.
A Wal-Mart spokeswoman in Brazil refused to comment on the asset sale. Ahold also declined to comment.
