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Brazil's Via Varejo sues former controlling shareholder GPA: source

Stock MarketsMay 19, 2020 03:05PM ET
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© Reuters.

By Gabriela Mello and Tatiana Bautzer

SAO PAULO (Reuters) - Brazilian appliance and electronics retailer Via Varejo SA (SA:VVAR3) is suing its former controlling shareholder GPA SA (SA:PCAR3) to be reimbursed for a 2009 contract payment, according to one source with knowledge of the matter.

At the time of the sale of Globex, one of the two companies that formed Via Varejo, to food retailer GPA, the acquirer committed to paying this debt, the source said. The value under dispute is unclear.

Via Varejo and GPA declined to comment.

Controlled by France's Casino France's Casino Guichard Perrachon SA (PA:CASP), GPA sold its full 36% stake in Via Varejo in June 2019 to a group of investors led by retail veteran Michael Klein and funds managed by broker XP (NASDAQ:XP) Investimentos.

Right after the sale, Via Varejo has kicked off efforts to turnaround the business and accelerate its e-commerce sales.

In November, the owner of PontoFrio and Casas Bahia chains opened an internal probe after receiving an anonymous tip on alleged accounting irregularities committed during the time it was controlled by GPA.

Via Varejo later confirmed the fraud allegations, citing an estimated impact of 1.4 billion reais in its fourth-quarter results.

Shares in Via Varejo were trading 6% up on Tuesday afternoon at 9.43 reais, outperforming Brazil's benchmark index Ibovespa (BVSP), which was 0.6% up.

Brazil's Via Varejo sues former controlling shareholder GPA: source
 

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