IFC May Put Up 25 Percent of Cash for Ahold Argentina Unit Sale
BUENOS AIRES -- The International Finance Corporation (IFC) is considering putting up as much as 25 percent of the cash needed to buy Disco SA, the Argentine unit of troubled Dutch supermarket chain Royal Ahold NV.
In a statement on its Web site, the IFC -- the private-sector investment arm of the World Bank -- says it "has been approached by potential bidders for Disco and is considering providing a portion of the required financing once the winning bid is determined."
A spokesperson clarified that the contribution could be an equity investment or a loan to the winning bidder.
The IFC statement said the organization was considering spending $25 million -- $ 50 million on the project, or a maximum of 25 percent of the purchase price. Argentine press reports have suggested the Disco chain is worth $300 million to $400 million. The project was presented on July 7 and could be approved at a board meeting July 29.
A spokesperson at the organization confirmed the investment was under consideration, though the official stressed this was only "the first stage." The official said the date for the IFC board to approve the project may yet be pushed back beyond July 29.
The IFC gave no list of the companies that were interested, though a report in Argentine business daily Infobae said a half-dozen local and foreign bidders were among the potential buyers.
Ahold announced it was selling the Argentine unit -- and the rest of its South American assets -- in April, a few weeks after the Dutch firm admitted it had overstated earnings at its U.S. Food Service unit. At the time, there were reports of errant accounting at Disco. Last week, Ahold announced it had completed a companywide internal probe and had found EUR8 million in problematic accounting at Disco.
In its statement, the IFC said it believed there were benefits for Argentina, as well as for the supermarket chain and the bidders, if it participates in Disco's purchase.
"In addition, the successful closure of this large, visible transaction should provide a strong demonstration impact of the opportunities available in Argentina at this time and, consequently, should generate investor interest for similar transactions and help accelerate the rehabilitation of Argentine corporates," the statement said.
Disco is Argentina's second-largest supermarket chain and is 100 percent owned by Ahold.
In a statement on its Web site, the IFC -- the private-sector investment arm of the World Bank -- says it "has been approached by potential bidders for Disco and is considering providing a portion of the required financing once the winning bid is determined."
A spokesperson clarified that the contribution could be an equity investment or a loan to the winning bidder.
The IFC statement said the organization was considering spending $25 million -- $ 50 million on the project, or a maximum of 25 percent of the purchase price. Argentine press reports have suggested the Disco chain is worth $300 million to $400 million. The project was presented on July 7 and could be approved at a board meeting July 29.
A spokesperson at the organization confirmed the investment was under consideration, though the official stressed this was only "the first stage." The official said the date for the IFC board to approve the project may yet be pushed back beyond July 29.
The IFC gave no list of the companies that were interested, though a report in Argentine business daily Infobae said a half-dozen local and foreign bidders were among the potential buyers.
Ahold announced it was selling the Argentine unit -- and the rest of its South American assets -- in April, a few weeks after the Dutch firm admitted it had overstated earnings at its U.S. Food Service unit. At the time, there were reports of errant accounting at Disco. Last week, Ahold announced it had completed a companywide internal probe and had found EUR8 million in problematic accounting at Disco.
In its statement, the IFC said it believed there were benefits for Argentina, as well as for the supermarket chain and the bidders, if it participates in Disco's purchase.
"In addition, the successful closure of this large, visible transaction should provide a strong demonstration impact of the opportunities available in Argentina at this time and, consequently, should generate investor interest for similar transactions and help accelerate the rehabilitation of Argentine corporates," the statement said.
Disco is Argentina's second-largest supermarket chain and is 100 percent owned by Ahold.