Casino sells Vietnam unit to Central Group for $1.1bn

Bloomberg

Casino Guichard-Perrachon SA agreed to sell Vietnam’s Big C grocery chain to Central Group at an enterprise value of €1 billion ($1.1 billion), extending an Asian divestment programme aimed to reduce the French retailer’s debt.
Casino will receive €920 million in proceeds, the St. Etienne, France-based company said in a statement last week. The disposal will bring the total of its divestments to 4.2 billion euros, it said. The shares rose as much as 2.1 percent in early Paris trading.
The deal follows Casino’s agreement earlier this year to sell control of Thai supermarket chain Big C Supercenter Pcl to billionaire Charoen Sirivadhanabhakdi’s TCC Holding Co. for €3.1 billion. Casino is selling assets to cut borrowings amid an attack from short seller Carson Block, who has said the retailer has a “dangerously” high debt burden – an assertion the company denies. Standard and Poor’s cut Casino’s credit rating to junk in March.
“This is another piece of good news for Casino,” said Bruno Monteyne, an analyst at Sanford C. Bernstein. “We expect the high valuation to act as a catalyst for the stock. This comes as welcome news after some were suggesting the sale wouldn’t go through after Lotte had pulled out.”
South Korea’s Lotte Group has said on April 22 that it wouldn’t pursue the asset, without giving a reason.
Casino is selling assets in Asia and Latin America to cut debt, while focussing on price and convenience in its largest market, France, as it competes for growth amid weak consumer spending.

Retail Boom
Rising retail sales and booming foreign investment are helping the Vietnamese economy to expand significantly. Achieving the government’s growth forecast of about 6.7 percent this year would make the Southeast Asian nation one of the fastest- growing markets in the world.
Consumer-product companies including Dutch brewer Heineken NV and Dove soap maker Unilever have experienced strong growth in the country over the past year.