November 20, 2012 / 2:30 AM / in 5 years

Chile Cencosud owners to subscribe to planned $1.5 bln capital increase

SANTIAGO, Nov 19 (Reuters) - The controllers of Chilean diversified retailer Cencosud said late on Monday they will exercise their preferential option in a planned capital increase destined for the purchase of French retailer Carrefour’s Colombian assets.

The Chilean retailer will seek approval on Tuesday of a $1.5 billion capital increase to help pay for the $2.6 billion acquisition, which would be the biggest purchase by a Chilean firm abroad to date.

Cencosud also aims to issue $1 billion in bonds on the U.S. market to help fund the purchase.

“The decision is based on the confidence that the controlling family has in the company, in the markets it operates in and the executive team in charge,” the controlling Paulmann family, owners of nearly 62 percent of Cencosud, said in a statement.

Cencosud, which listed on the New York Stock Exchange earlier this year, recently acquired Brazilian supermarket chain Prezunic and Chilean department store Johnson’s, and also has operations in Argentina and Peru.

The Carrefour deal will give Cencosud 72 hypermarkets, which combine grocery and department stores; 16 convenience stores; and 4 cash-and-carry stores in Colombia, adding to the some 900 stores and 26 commercial centers it operates in the region.

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