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THE HAGUE, Netherlands - Dutch retailer Ahold will call 920 million euros (U.S.$1.13 billion) in convertible notes early in order to cut debt, Reuters reports.
The retailer, which needed rescue financing and an equity boost to emerge from a 1 billion-euro (U.S. $1.22 billion) profit overstatement scandal in early 2003, said it had no current plans for takeovers and that bids for its Spanish assets were coming in.
Ahold c.f.o. Hannu Ryopponen said in a shareholders meeting that the 4.0 percent convertible subordinated notes due in 2005 would be paid at par, together with accrued interest and unpaid interest in line with a plan revealed in April.
The company's new management is working to improve operating margins and cut debt -- which stood at 7.5 billion euros (U.S. $9.17 billion) at the end of 2003 -- in order to return Ahold's junk-rated bonds to "investment grade" by the end of 2005.
Ahold, which owns Stop & Shop and Giant-Carlisle in the United States, aims to raise 2.5 billion euros (U.S. $3.06 billion) through disposals of units. So far it has withdrawn from Latin America and Asia, and has received several bids for its Spanish assets.