SMU Adds to Sale List

Chilean retailer SMU has indicated it will look to sell home improvement store Construmart and wholesalers Distribuidora del Pacifico and Peru-based Mayorsa, it says, as part of a plan to raise $300m-$400m. The move follows SMU’s indications last month that it would look to sell its 40% stake in Supermercados Monserrat. Monserrat would likely account for $140m of the $300m-$400m target. SMU is in the process of valuing the assets and looking for possible buyers. In July, it revealed reporting errors that put it in violation of debt covenants. Shareholders will approve this week a $500m equity capital increase, in which controller Alvaro Saieh is expected to put in at least $250m. SMU also plans to reduce capex targets in addition to the asset sales. The company does not respond to a request for comment on the advisors it is working with in the sale process. The covenant issues meant a Moody’s downgrade to B3 last week. SMU’s 2020 bonds were heard trading Monday in the mid-70 range.