Chile group ups Cencosud stake via cap increase
SANTIAGO, Dec 31 (Reuters) - The Paulmann group, which controls Chilean retailer Cencosud CEN.SN, has subscribed nearly 80 billion pesos ($125.7 million) to a capital increase, raising its stake to 63.69 percent, the company said on Wednesday.
Cencosud, one of Latin America's largest retailers, proposed the capital increase in October, saying it wanted to safeguard itself from any increase in costs in markets where it operates amid the global financial crisis.
However, there were few other takers for the capital increase, under which Cencosud aimed to raise around $255 million, because the share is currently trading below the 1,100 peso per share price envisaged in the offer. Shares in Cencosud closed on Tuesday at 905.24 pesos.
"The funds raised via the capital increase will be used to strengthen the cash flow of the company, which will then have greater liquidity and independence if any opportunities present themselves in the market," Cencosud said in a statement.
Under the terms of the capital increase, those who subscribed to the capital increase have the option to buy up the remaining shares on offer under the same terms for a year.
Cencosud, which operates supermarkets, department stores and other stores that sell housewares and construction materials, is headquartered in Santiago and operates in Argentina, Brazil, Colombia, Chile and Peru. (Reporting by Antonio de la Jara; Editing by Brian Moss)
