Laurus Completes $87 Million Sale Leaseback of Two Distribution Centers

Reuters - September 5, 2006

Loss-making Dutch supermarket group Laurus NV (LAUR.AS) said on Tuesday it sold two distribution centres to a unit of U.S. real estate firm Heitman International LLC and entered a lease agreement with the new owners.

Laurus said in a statement the purchase price of the two properties, totalling about 68 million euros ($87 million), was almost equal to their book value. It said the disposal of one centre was accounted for in its forecasts for shareholders' equity and net debt at the end of 2006.

Laurus shares tumbled on Tuesday as investors were spooked by a spate of broker downgrades, doubts over the company's survival and speculation about a possible rights issue.

Laurus, the Netherlands' second-biggest food retailer in terms of sales after Ahold (AHLN.AS: Quote, Profile, Research), is struggling to remain solvent after a failed overhaul of its stores in the face of cutthroat competition among Dutch supermarkets.

Last week, it posted a first-half loss of 37 million euros, warned of a likely full-year loss and said it was set to breach a bank loan requirement later in 2006. Analysts said investors were also concerned by the possibility of a rights issue.

French peer Casino (CASP.PA: Quote, Profile, Research) has a stake of 45 percent in Laurus and an option to take majority control from July 1, 2007 to Dec. 31, 2009. Sphere: Related Content