UPDATE 1-Chile Cencosud mulls US ADR issue, shares jump

(Updates with share price gain)

SANTIAGO Feb 9 (Reuters) - Chilean diversified retailer Cencosud is studying a possible share issue in the United States via American depositary receipts, or ADRs, the company said on Thursday, sending its shares 3.5 percent higher.

Cencosud told the local SVS securities regulator in a statement that the ADR issue would be part of its previously approved capital increase of up to $2 billion.

Shareholders of Cencosud approved the capital increase in April last year.

Following the news, shares of Cencosud reversed earlier losses to trade 3.49 percent firmer at 3,033.90 pesos each, helping lift the wider IPSA blue chip index, which was up 0.56 percent.

The retailer, which has operations in Argentina, Brazil, Colombia, Peru and Chile, plans to invest $2.3 billion over the next two years in the region, the company has previously said, as firm domestic demand and easy access to credit has boosted the retail sector in several countries.

In late 2011, Cencosud took control of Chilean department store rival Johnson's.

Cencosud earlier this year completed the purchase of Brazilian supermarket chain Prezunic, adding to its plans to remain focused on expansion in the Brazilian supermarket sector. (Reporting By Alexandra Ulmer; Writing by Anthony Esposito; Editing by Steve Orlofsky)