In a strategic move to alleviate financial leverage, the GPA group, owner of the Pão de Açúcar, sold 11 of its stores to an anonymous private fund in a sale and leaseback. The agreement, which involves the sale and subsequent lease of the establishments, was valued at R$330 million.
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According to an official statement released on Monday (19), the leases will have an initial term of 15 years, with the exception of three stores that will be leased for an initial period of 18 years.
This type of agreement will allow Pão de Açúcar to continue operating the stores while simultaneously releasing capital linked to the properties.
The Financial Leverage Reduction Plan
GPA intends to significantly reduce its financial leverage throughout 2023 and 2024. This sale of stores is in line with this strategic objective, allowing the “reduction of debt net income and reinforcement of its capital structure”, according to the company.
The group recorded a consolidated net loss of BRL 248 million in the first quarter of 2023, after a profit of BRL 1.4 billion in the same period in 2022.
This precarious financial situation, together with the decision to disassociate itself from its hypermarket segment, accelerated the need to reduce financial leverage.
Next steps for GPA
As part of the plan, GPA also intends to complete the sale of non-strategic assets and implement operational improvements, aiming to reach an adjusted Ebitda margin of 8% to 9% in 2024.
Additionally, the company intends to reduce excess inventory in the stores and sell Grupo Éxito's stake after a segregation process currently underway.
In this context of strategic realignment, the sale and subsequent leasing of 11 stores is a calculated move that allows GPA to fulfill its goals financial and operational. The actions resulting from this restructuring plan have the potential to place the group in a more solid and sustainable position in the future.