Carrefour's dash for cash may strike gold in Brazil
* Already raised 2.8 bln euros through asset sales
* More non-strategic sales seen raising 1.5-2 bln euros
* Partial listing in Brazil seen raising 1-2 bln euros
By Dominique Vidalon and Pascale Denis
PARIS, Nov 22 (Reuters) - French retail giant Carrefour has seen many changes since its former boss made an ill-fated attempt to snap up Brazil's top supermarket chain last year, and South America's top economy could light the spark for yet more.
Six months since he became chief executive of Europe's biggest and the world's number two retailer, Georges "The Cleaner" Plassat has lived up to his nickname, with a clearout of businesses in non-strategic countries to raise cash to revive its struggling hypermarkets.
More bold moves could be on the cards, including floating part of the Brazilian business - already Carrefour's second-largest market after France, making 13.5 percent of its 2011 sales of 91.5 billion euros - to fund expansion in one of the world's largest and fastest-growing consumer markets.
Carrefour, which has raised 2.8 billion euros ($3.6 billion) selling units in Indonesia, Colombia and Malaysia, could secure another 1.5-2.0 billion from disposals in Turkey, Poland, Romania and Taiwan, and a further 1-2 billion from listing a minority stake in Brazil, analysts said.
"We believe the disposal plans are not over, although we do not expect more divestments on such a large scale between now and the end of the year," said Natixis analyst Pierre-Edouard Boudot, adding a minority listing in Brazil "might make sense".
Carrefour is the second-largest operator in the Brazilian food retail market, with a 13 percent market share, behind leader Grupo Pao de Acucar (GPA), controlled by Carrefour's archrival Casino, and just ahead of U.S. retail giant Wal-Mart.
GPA's Brazilian chairman tried to merge with Carrefour Brazil last year, despite a long relationship with Casino. Casino derailed those plans and has since secured full control of GPA.
A senior Paris-based banker said a Brazilian listing was a "distinct possibility" to "free up capital".
Carrefour declined to comment.
Plassat took over as CEO on May 24 with a brief to reverse years of underperformance in Carrefour's European markets, notably in France, where it makes over 40 percent of sales.
As part of its strategy of raising cash to defend positions in western Europe, China and Brazil and strengthen its balance sheet, Plassat on Tuesday sold Carrefour's 60 percent stake in its Indonesian operations to local partner CT Corp for 525 million euros.
Last month it sold its Malaysian unit to Japan's Aeon for 250 million euros and decided to quit Singapore by the end of the year and pay 220 million euros to leave Greece, where sales had been falling.
Plassat's biggest coup was a deal last month to sell Carrefour's Colombian stores to Chile's Cencosud for a higher-than-expected 2 billion euros.
Plassat's dealmaking skills and retail expertise have already started to boost Carrefour's share price.
The stock has risen 43 percent since mid-July, outperforming a 5.6 percent gain in the European retail sector index pushing its market value to 12.8 billion euros.
"Plassat is certainly living up to his nickname, but if Carrefour is to have a future, more markets will need to be divested and more capital will have to be reinvested in the core business," said Natalie Berg, head of research firm PlanetRetail.
Carrefour has said it was reviewing the future of its local joint venture with Turkish partner Sabanci.
EYES ON BRAZIL
Carrefour is expected to reinvest the cash it has raised so far mostly in its European business to boost capital expenditure, which has fallen to an estimated 1.6-1.7 billion euros in 2012, about 2 percent of sales, down from 2.3 billion. Analysts have said this level barely covers the cost of maintaining existing stores.
Carrefour also needs cash to cut debt, which was about 7 billion euros at end-2011, and sustain low prices in France to boost traffic at its struggling hypermarkets.
More funds may be needed to boost expansion in China and Brazil, though Plassat has yet to map out his plans there.
Chinese sales have struggled as economic growth slowed, but Brazil has been a bright spot, recording like-for-like sales growth of 9.7 percent in the third quarter of 2012.
Were Carrefour to step up expansion in Brazil, listing a minority stake in the business might be a funding option.
"A potential IPO of Brazil could be feasible and would have a very significant impact," Barclays analysts said in a note.
Barclays said floating 25 percent of the Brazilian business, which it values at 4.7 billion euros, could raise 1.2 billion.
There have been unconfirmed reports in the Brazilian press that Carrefour might seek to list a minority stake in its Brazilian crown jewel, wholesaler Atacadao, which analysts say makes about 50 percent of sales and profits in Brazil.
Proceeds from a listing could be reinvested to accelerate the roll out of Atacadao, to diversify into convenience stores or to make bolt-on acquisitions in Brazilian regions where Carrefour's presence is still limited.
Cash could even be used to step up expansion elsewhere in Latin America, such as Argentina, where Carrefour is second to Chile's Cencosud.
PlanetRetail analyst Gildas Aitamer said Atacadao needed to speed up its store expansion in the face of fierce competition from Wal-Mart's Maxxi Atacado and Casino's Assai stores.
Natixis estimates that an IPO of Atacadao could bring in 1-2 billion euros. Exane BNP, which values Atacadao at 5 billion, said listing 20-25 percent could raise 1 billion euros.
Listing part of Atacadao would enable Carrefour to retain control without jeopardising long-term growth prospects, but some caution it could introduce additional complexity in group structure and expose the lower profitability of the rest of the Brazilian business, mostly the hypermarkets.
The same senior banker also said: "The danger is that it creates a holding discount (on Carrefour shares), since the emerging market is the most exciting part of the business."