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Scandal-hit retailer quits LatAm
AMSTERDAM, The Netherlands (Reuters) -- Dutch retailer Ahold on Thursday said it aimed to sell off all its Latin American operations to cut its debt pile after it was hit by an accounting scandal. The world's third-largest retailer said it planned to divest its operations in Brazil, Argentina, Peru and Paraguay and that it was already in negotiations to unload its Chilean assets. It said it would withdraw from Latin America, where rapid devaluations and questionable book-keeping have eroded its results, in a responsible way with respect to customers, associates and suppliers. An Ahold spokeswoman said there were not yet any specific negotiations under way outside of its Chilean business, but several parties had shown an interest. "Although we intend to proceed expeditiously with our divestment plan, we are determined to maximise the value we receive for these operations and obtain the best possible result for all stakeholders," Ahold board member Theo de Raad said in a statement. In Argentina, Ahold will sell the Disco SA subsidiary once the 2002 accounts have been signed off, pending an ongoing investigation into suspected irregularities. The unaudited sales for 2002 amounted to 762 million euros. A Uruguayan judge is probing a case of alleged fraud at a Uruguayan investment company, the Velox group, Ahold's partner in Argentine supermarket chain Disco since 1998. Ahold bought out Velox's interest in Disco in 2002 after Velox went bankrupt. In Brazil, Ahold will sell its three wholly owned operations, Bompreco, G. Barbosa and Hipercard, which had unaudited 2002 net sales of 1.3 billion euros ($1.4 billion). In Peru, sales were 243 million euros, and in Paraguay sales were 36 million. Ahold is currently in the process of selling its Chilean operation, Santa Isabel, to Chilean group Cencosud. Ahold said in February it had unearthed accounting irregularities at its U.S. Foodservice unit, whose customers include restaurants, hotels, schools and other institutions. Ahold, which is being investigated by the U.S. Securities & Exchange Commission, said U.S. Foodservice overstated its profits by more than $500 million following discrepancies in accounting for vendor allowances. Chief Executive Cees van der Hoeven and Finance Director Michiel Meurs stepped down after the problems emerged.
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