This is the first such move since entering the Romanian market in 2005 and an unusual one for the local grocery retail where parent companies are still feeding money into their Romanian operations.
This move by Kaufland comes at a time when the company halted expansion so the investment needs are lower. The company will have opened only five hypermarkets by the end of 2015 and investments should amount to RON150 million to RON225 million. The retailer posted RON409 million profit in Romania last year alone. Overall profit since its entry on this market stands at RON1.5 billion.
Kaufland officials did not return ZF’s calls for comment on the reasons for this capital reduction.
Kaufland Romania SCS’s share capital will go down from RON1,673 billion to RON1,563 billion, according to the Official Gazette. This is the first reduction after 2005.
The share capital increased until 2009, as the parent company invested in expansion in Romania. Once the business in Romania started doing well and profit was up, the retailer paid for expansion with local funds. (EUR1=RON4.4434)
(English version by Loredana Fratila-Cristescu)