German retailer Metro to split without capital hike | Progresiv
German retailer Metro AG is proceeding with plans to separate its wholesale and food business from its consumer electronics chain, predicting both units can achieve an investment grade rating without needing a capital increase. 
Metro, Europe's fourth-biggest retailer by sales after the likes of Carrefour and Tesco, said a supervisory board meeting on Monday had approved the plan. The consumer electronics business will keep a 10 percent stake in the new wholesale and food specialist business to strengthen its capital base, Metro said in a statement.
Some analysts had expected that the retailer, which outlined the plan in March, could need to raise as much as 900 million euros in fresh capital to achieve an investment grade rating for both businesses.
Metro reiterated that the demerger would be complete by mid-2017 and said the group would be split into two organisationally separate entities on a pro-forma basis from Sept. 30, 2016.
It said almost all of the group's existing financial liabilities would be assumed by the wholesale and food company.
Metro has spent several years restructuring and selling non-core businesses such as its Kaufhof department stores, to focus on its Metro cash-and-carry business and Media-Saturn electronics chain.
Under its latest plan, Metro wants to spin off the cash-and-carry business and its struggling Real hypermarket chain, which together have sales of about 38 billion euros, leaving Media-Saturn as the main holding of the core group.
Metro proposed that its Chief Finance Officer Mark Frese should become CFO of the consumer electronics unit, while Christian Baier, current finance chief of the cash and carry unit, would take over the role at the wholesale and food group.
(Source: uk.reuters.com)
