The Falabella Group faces a negative outlook after the Fitch Ratings agency lowered its credit rating from “BBB-” to “BB+”. This situation negatively impacts your power and investment capacity. Likewise, it reported losses of approximately US$5 million for the third quarter of this year, raising its net debt to US$4,016 million in September.
Thus, the Chilean giant decided to transfer and incorporate its Peruvian assets to its subsidiary that operates in Mallplaza. This transaction will allow Mallplaza to incorporate into its management the 11 Open Plaza Perú shopping centers, which have approximately 323,000 additional square meters, and would acquire 100% of Mallplaza Perú SA
“Falabella would thus begin to operate in Peru under a single real estate structure, aligning with the company’s strategy of being increasingly simpler and more efficient in its operation,” the company stated.
How much will the transaction cost be?
In this sense, according to the estimates of the investment bank JPMorganthe operation would be valued at around US$400 million, which would be transferred from Mallplaza to Falabella’s parent company.
“It would represent between 40% and 50% of its divestment plan recently updated in its latest financial report, which ranges between US$800 and US$1,000 million to reduce debt and leverage,” highlighted the financial entity.
This move would leave potential income equivalent to 12% of Falabella’s gross debt at the parent level, which would result in an estimated reduction of net debt over EBITDA (excluding Mallplaza) for the third quarter.
However, the bank expressed skepticism about the ability of the potential amount involved to “transform the currently highly leveraged balance sheet.” As a consequence, he suggested that Falabella could accelerate its deleveraging process and, in addition to the sale of assets to its subsidiary, consider a capital increase to gain confidence in the market.
It is important to note that the company’s liabilities, excluding banking businesses, They amount to around US$5 billion.
Source: Larepublica
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