French mass retailer Casino Group has announced that it will dispose its Vietnam-based assets, the Big C retail outlets, as part of a global restructuring of its assets to pare debt.
The deal could fetch the firm up to 750 million euros ($813 million), according to a Bloomberg report.
The move is part of a restructuring plan to cut debt even as the group said, “Vietnam is one of Southeast Asia’s most promising markets” buoyed by a vibrant economy and a large, young population.
Casino Group will deleverage more than 2 billion euros to strengthen its financial flexibility, mainly through real estate transactions and disposal of non-core assets, including its operations in Vietnam, the company said, in a statement.
Its debt is reported to have reached $5.8 billion.
“Casino Group will thus continue to focus on its growth strategy in its key markets in France, Latam and Asia around buoyant assets,” the company said.
Thai conglomerates and Vietnamese real estate giant Vingroup are reportedly in the race for the Big C assets. An email DEALSTREETASIA sent to Casino Group seeking information on the speculation remained unanswered at time of publishing this article.
A representative from Big C Vietnam revealed to local media that the plan of the parent group will not affect its current operation and investment in the country.
Property developer Vingroup owns a network of over 220 retail units called VinMart and VinMart+, along with 12 shopping centres in Vietnam. The company targets to develop up to 100 shopping malls and thousands of convenience stores by 2020.
Meanwhile, a number of Thai retail investors are strengthening their foothold in the Vietnamese market in 2015. Central Group earlier this year acquired a major minority stake in Vietnam’s leading electronics retailer Nguyen Kim, after opening two Robins shopping malls in the country. It was also rumoured that Central Group eyed the acquisition of a second local player, Pico.
Also Read: Thai Central Group acquires VN’s Nguyen Kim
In addition, Berli Jucker, another Thai syndicate, reached a deal to buy Metro Cash&Carry Vietnam chain from Germany’s Metro Group for 655 million euros in 2014, but the transaction was later rejected by its shareholders.
Metro Group was the first European retailer to plan to sell its Vietnamese operations..
Big C supermarket chain entered Vietnam in 1998, being one of the maiden retail players in this Southeast Asian country. It currently runs over 30 hypermarkets across the country. In addition to brick-and-mortar retailing, Casino Group is also implementing e-commerce website Cdiscount.vn.
Being one of the five biggest retailers in Vietnam, Big C enjoyed 312 million euro revenue during the first half of this year.
Meanwhile, the French company said one of the deleveraging plan’s components consists in externalising the value of real estate portfolio through the participation of investors to its real estate activities in Thailand and Colombia.
In Thailand, Big C owns almost 800,000 sqm of gross leasable area in its shopping malls. Big C Thailand and Éxito (Colombia) brands will continue to fully consolidate their real estate activities.
Big C was originally Thailand’s second largest mass retailer, founded by Central Group, before being acquired by the French group in 1999.
The Thai subsidiary of Casino Group, Big C, is looking at fundraising through a real estate investment trust (REIT) in 2016. Its expansion plan includes the launch of six new hypermarkets, three branches of Big C Markets and 75 branches of Mini Big C next year.