February 28, 2024

GPA sells 11 more stores and puts up R$330 million in cash

Grupo Pão de Açúcar has just finished selling 11 more stores – raising R$330m which will help the retailer off its balance sheet.

The sale was made to an undisclosed private trust, at A Selling and renting back.

Eight of the eleven stores will be leased to GPA on an initial 15-year lease; The remaining three will be leased for 18 years.

The sale comes just over a year after GPA sold 17 other stores to a Barzel Properties manager for R$1.2 billion. In 2020, the retailer has already sold another 39-store package to the TRXF11 Fund, putting another R$1.2 billion in its pocket.

11002 75ed9d14 c9df 9523 4e8b 891b19af5c17Today’s deal came out a little cheaper for the buyer: it includes a rate max nearly 9%, higher than the sales made in 2020 by GPA, which came out with one rate max 7.1%. At the time, the reality of interest rates was different.

The sale is part of CEO Marcelo Pimentel’s plan to reduce GPA leverage throughout this year and into 2024.

This process must also include the sale of other assets colorincluding the company’s headquarters in São Paulo, and a hypermarket owned by the chain in Rio de Janeiro.

in communicate In the first quarter with analysts, GPA’s chief financial officer said the headquarters will be valued at R$250 million, while a hypermarket in Rio will be another R$250 million.

The leverage reduction also includes operational improvements, which should bring the company’s adjusted EBITDA margin to between 8% and 9% in 2024. In the first quarter, the margin closed at 6%.

GPA has also said it wants to reduce excess inventory in its stores, and sell its stake in Grupo Éxito once the asset separation process is complete.

At the end of the first quarter, the cumulative leverage ratio was 2.7 times, with a net debt of R$3 billion and EBITDA of R$1.1 billion in the last 12 months.

A year ago, net debt was much higher, at around R$4.5 billion.

Peter Arbex