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AMSTERDAM - Dutch retail giant Royal Ahold NV said Friday that it is in dispute with Chile's main supermarket retailer D&S SA over the acquisition of 10 Argentine stores from D&S in 2000, Dow Jones newswire reports.
The companies are in dispute over what currency Ahold has to pay D&S for the stores. In dollar terms the payment would be $90 million, while in pesos the sum would be cut to $38 million as of Jan. 2, D&S said.
D&S has said Ahold's Disco SA Argentine supermarket unit owes it $90 million. The money is due in May and is guaranteed to be paid in U.S. dollars by an Ahold unit registered in the Netherlands Antilles.
Ahold's Disco unit, however, wants to make the payment in Argentine pesos under terms that the country recently issued for the repayment of debt in local currency.
Argentina abandoned the 1:1 dollar peg of its peso a year ago and the currency has since dropped 75 percent against the greenback.
The Chilean retailer said it disputes Ahold's right to pay in pesos and is taking legal action in Argentina, Chile and the Netherlands to ensure repayment under the original terms.
Ahold spokesman Nick Gale, based in the Netherlands, said: "I can confirm we have a difference of opinion with D&S, but we don't want to let this escalate." Gale added that Ahold hasn't as yet been officially informed D&S is taking legal action.
"This is not a key issue for Ahold," said Oscar Poos, a retail analyst at Oyens & van Eeghen. "The $90 million is a relatively small sum for the company. Their main issue is to get organic sales growth (sales growth excluding acquisitions) back on track."