US exit will cost Tesco
Tesco Plc (TSCO)’s exit from its unprofitable Fresh & Easy U.S. business may cost the U.K.’s largest grocer about GBP 250 million (USD 382 million, EUR 293 million) in cash, Shore Capital (SGR) estimates.
While Tesco would face a GBP 1 billion (USD 1.5 billion, EUR 1.2 billion) writedown on the U.S., according to a Telegraph report, the “greater area of interest is the cash costs from exit, given most investors will have already anticipated the paper adjustment to the asset base,” Shore analyst Clive Black wrote in a note to investors.
Tesco Chief Executive Officer Philip Clarke is reviewing all options for the U.S. stores and has said he will report on the progress at the company’s results on 17 April. While Aldi is seen as one of the potential buyers, a closure of Fresh & Easy and then a piece-by-piece sale of the assets remains the most likely outcome, the Telegraph reported today, without saying where it got the information.