Banks Back Ahold Unit's Spending Plan-WSJ

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Banks Back Ahold Unit's Spending Plan-WSJ

AMSTERDAM -- The U.S. supermarket division of Ahold, the world's number three retailer rocked by an accounting scandal, can proceed with a capital spending plan after creditor banks approved it, The Wall Street Journal reported on Thursday.

The unit's head also told the newspaper that only two of its 40,000 suppliers have tightened payment terms after Ahold disclosed that another one of its divisions, U.S. Foodservice, overstated its profits by at least half a billion dollars in 2001 and 2002.

Last month's revelation shaved two-thirds off Ahold's share price and caused the resignation of Chief Executive Cees Van der Hoeven and Chief Financial Officer Michiel Meurs.

"If you ask me where on the worry chart (the suppliers are), it's way down on the list," William Grize, the head of Ahold's U.S. supermarkets division, was quoted as saying by the newspaper.

Grize said he does not expect Ahold to be forced to sell any of its U.S. supermarkets in the near term to cut down its debt of 12.3 billion euros.

He added that the capital expenditure plan approved by Ahold's creditor banks, who extended the group a key 3.1 billion euros credit line to ensure liquidity earlier this months, included 60 to 70 new and replacement stores in 2003.