Central Retail Corporation Plc (CRC) has approved the sale of Rinascente, its Italian department store business, to Harng Central Department Store Co Ltd, part of Central Group and a major shareholder of CRC, in a deal worth 14.7 billion baht.
Panet Mahankanurak, CRC’s chief financial officer, said the divestment aligns with the company’s long-term strategy to rebalance its portfolio, allowing it to concentrate on expansion in Thailand and Vietnam, where it holds strong expertise and sees high growth potential.
He said CRC will channel proceeds from the sale into strengthening its financial position and pursuing mergers and acquisitions to reinforce its presence in Southeast Asia. The move underlines the group’s focus on markets it considers its core.
Although CRC had considered expanding further in Europe, Mr. Panet explained that the high capital demands of such investments and the potential diversion of funds away from Thailand and Vietnam led the company to step back from those opportunities.
According to him, Central Group’s offer to acquire Rinascente provided CRC with a timely chance to divest a non-core operating asset at an attractive valuation.
The sale price of about 14.7 billion baht will provide CRC with capital to support strategic growth and reduce leverage, he said.
CRC expects to record a sales price well above its 2018 investment cost, generating an estimated post-tax profit of around 6 billion baht. The exact figure will depend on exchange rates and Rinascente’s net assets at the time of completion.
The transaction will also strengthen CRC’s balance sheet, with cash proceeds used to repay borrowings from financial institutions, cutting debt by about 5.3 billion baht.
Mr. Panet added that the deal reduces the company’s exposure to Italian laws and regulations and lowers the share of revenue subject to Italy’s higher effective tax rate of around 30%, compared with CRC’s current effective tax rate of about 23%.
Despite the divestment, CRC will continue to benefit from business cooperation with Rinascente.
The deal also paves the way for dividend distribution of up to 7.7 billion baht, or 1.28 baht per share, once completed.
The plan remains subject to approval by the board and shareholders after CRC receives the net proceeds. A shareholder vote is scheduled for Nov 6, and the company has appointed an independent financial advisor to provide an opinion on the fairness of the transaction.
