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AMSTERDAM - Ahold today slashed its 2002 earnings outlook by as much as two-thirds after its Argentine partner defaulted on its bank debt, Reuters reports.
The Dutch retailer said it now expected earnings per share growth this year of 5-8 percent, after taking a 350-450 million euro ($354-$455 million) charge, instead of the 15 percent increase it had predicted previously.
Ahold said Velox Retail Holdings, its partner in joint venture Disco in which the Dutch company has an 85 percent stake, had defaulted on its bank debt. Ahold will take over Velox's loan obligations and buy out its share of the Latin American venture for $490 million in the third quarter.
Ahold's battered shares have lost over half their value from a year ago and were ravaged in April after the publication of two sets of accounts under U.S. and Dutch standards that differed widely, undermining investor confidence.
Ahold said full-year net profit could be 136 million to 164 million euros lower than it had originally planned following the default, but declined to give a concrete outlook for full-year earnings.