Upon execution of the transaction, Cencosud would receive a cash payment of approximately
The signed contract includes all the terms needed for the materialization of the partnership. The agreement is subject to approval from the regulators in
Cencosud's cash generation, as measured by EBITDAR, was
The company's financial strategy for 2014 includes the successful completion of the announced transaction with most of the net proceeds being applied to reduce debt; divesture of non-core assets; and achieving positive FCF during 2014. The confluence of these factors would likely result in revising the Outlook to Stable from Negative. Conversely, the inability of the company to materially lower leverage during 2014 due to continuation of high levels of debt post execution of this signed credit card joint venture transaction coupled with aggressive capex levels could result in a downgrade.
Additional information is available at 'www.fitchratings.com'.
Source: Fitch Ratings
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