Chile La Polar drops on client compensation plans SANTIAGO (Global Markets) - Shares of Chilean retailer La Polar (LAP.SN) fell as much as 21 percent Friday on plans to compensate clients affected by the worst credit scandal the country has seen in years.Stock Market Predictions
The company has admitted that it restructured the debt of hundreds of thousands of clients without their consent, limiting loan provisions that would have hurt its bottom line.
"The drop is due to the fact that the firm has to pay out funds for the renegotiation with clients," said Claudio Gonzalez, head of research at Santiago's Tanner brokerage.
Starting July 11, the company has said it will refund clients who overpaid due to the unilateral refinancing.
The scandal has also forced the company to increase loss provisions by $890 million, wiped out as much as $1 billion of its market valuation, triggered a criminal investigation and prompted the firing of at least 11 senior managers.
The company met on Friday with creditors holding $139 million of its securitized bonds, agreeing to a more exhaustive investigation of the firm's finances.
Most of La Polar's creditors agreed to hold off accelerating payment of securities on Wednesday.
Chile's No. 4 retailer has $580 million in outstanding corporate bonds, and Wednesday's deal was seen as key for the department store chain to remain viable.
(Reporting by Felipe Iturrieta. Translated by Alexis Krell. Editing by Simon Gardner, Brad Haynes and Gerald E. McCormick)
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