August 25, 2017 / 7:02 PM / in 2 years

Chile's Cencosud to sell $1 billion in assets to cut debt, spur growth

SANTIAGO (Reuters) - Chile’s Cencosud SA (CEN.SN), one of Latin America’s largest retailers, plans to sell up to $1 billion in non-strategic assets in the next 12-18 months to cut debt and accelerate growth, the company said on Friday.

The decision comes a day after Cencosud reported a second-quarter net profit that came in below market expectations. The results raised concerns among some analysts about the retailer’s debt levels.

Cencosud disclosed its plan to sell some assets in a letter to Chile’s regulator.

“The resulting funds from said plan will be used to reduce company debt and accelerate organic growth in the region,” the company said in the letter. It did not specify which assets would be sold.

Cencosud, which also has units in Argentina, Brazil, Colombia and Peru, on Thursday reported that second-quarter net profit fell 73 percent in yearly terms amid regional economic weakness and a high base of comparison.

In a phone call with journalists on Friday, Cencosud’s chief financial officer, Rodrigo Larrain, said the group would be more comfortable with a ratio of debt to earnings before interest, taxes, depreciation and amortization of around three, rather than its current level of about four.

Cencosud shares on the Santiago bourse were down 0.62 percent at 3:32 p.m. local time (1832 GMT) after volatile trading.

Reporting by Felipe Iturrieta; Writing by Luc Cohen and Gram Slattery; Editing by Leslie Adler

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