CENCOSUD Announces a Binding Agreement with ITAU UNIBANCO HOLDING S.A. for the Joint Development of the Financial Retail

CENCOSUD Announces a Binding Agreement with ITAU UNIBANCO HOLDING S.A. for the
  Joint Development of the Financial Retail Business in Chile and Argentina

PR Newswire

SANTIAGO, Chile, June 17, 2013

SANTIAGO, Chile, June 17, 2013 /PRNewswire/ --Cencosud (NYSE: CNCO, BCS:
CENCOSUD) a leading South American retailer with operations in Chile,
Argentina, Brazil, Peru and Colombia, today announced it has signed a binding
MOU with Itau Unibanco Holding S.A. (Itau) to jointly develop the financial
retail business in Chile and Argentina.

Under the terms of the agreement, Itau Chile will acquire 51% of the shares of
Cencosud Administradora de Tarjetas (CAT), Cencosud's credit card operator in
Chile. In Argentina, Cencosud will create a new entity, in which Itau
Argentina will contribute with equity, to jointly develop the business.

Additionally, in both countries Itau will provide funding to finance 100% of
the current credit portfolio and future growth.

Business Partnership Structure

The agreement signed today includes all the conditions for the establishment
of the new partnership. During the next 90 days, the parties will work to
translate these terms into the respective contracts. The final contracts are
subject to approval from the regulators both in Chile, Brazil and Argentina.

This partnership is aligned with the long-term strategic plan of Cencosud,
which aims to enhance the financial services and value proposal offered to
Cencosud's clients without the need to devote internal resources, replicating
the successful business model currently operating in Brazil and Colombia.

The agreement permits Cencosud to add the know-how and risk management from
Itau, the largest bank in Latin-America, allowing our customers to maintain
their current benefits along with a wider offering of financial products,
higher service quality and deeper access to credit.

The Transaction in Figures

Cencosud will receive a total up-front cash payment of approximately USD$
1,580 million, of which USD$ 280 million will be from the sale of 51% share of
CAT and USD$ 1,300 million in the form of payment of the credit card portfolio

  oThe term of the agreement is 15 years

       oPurchase of 51% of the shares of CAT by Itau Chile for approximately
         USD$ 280 million.
       oAfter 15 years, an incremental purchase price adjustment will be
         calculated upon achievement of business targets.


       oCencosud will create a new entity with approximately USD$7 million in
       oItau Argentina will contribute with approximately USD$ 27 million in
         the form of capital increase, ending with a 51% ownership
       oAfter 5 years a purchase price adjustment will be calculated upon
         business targets.

  oIn addition, Itau will fund 100% of the portfolio in both countries for
    around USD$ 1,300 million, currently funded by Cencosud.

Benefits of the Transactions

  oInitial cash inflow of approximately USD$ 1,580 million that will be used
    to strength Cencosud's balance sheet; of which approximately USD$400
    million will be used to reduce Banco Paris liabilities. We expect that
    with the transaction the Company will reach stronger financial ratios in
    line with Cencosud's commitment to investment grade.
  oThe following pro-forma figures show a simulated scenario in which the
    transaction would be executed today and the use of proceeds would be used
    to reduce debt.

       o100% reduction of Argentina´s financial debt of approximately USD 180
         million, with the funds received locally for the portfolio currently
         funded by Cencosud
       oApproximately USD 400 million to pay down Banco Paris debt
       oApproximately USD 1,000 to reduce other Cencosud's liabilities

Pro-forma Amortization Schedule

2013 22
2014 59
2015 316
2016 198
2017 215
2018 238
2019 36
2020 36
2021 816
2022 76
2023 1277
2024 95
2025 113
2026 114
2027 98
2028 264
2029 47
2030 17
2031 108

     oThe proforma duration would increase from 5.98 years to 6.9 years
     oThe financial costs of Cencosud would be reduced versus the previous
     oLeverage of the Company would decrease from 3.7x at March 2013 to 2.7x
       (proforma as of June 30, 2013).

The Financial Retail Service in Chile and Argentina

Figures as of March 31^st 2013          Chile       Argentina
Revenues LTM                            USD 460 MM  USD 88 MM
EBITDA LTM                              USD 96 MM USD 30 MM
Gross Loan portfolio (exc. Banco Paris) USD 909 MM  USD 277 MM
Provision / loan portfolio              7.9%        5.4%
Net write-off / loans                   10.1%       0.6%
Monthly statements of accounts          1,698 k     620 k
Total credit card issues                2,100 k     963 k


Cencosud has 6 bank loans and 11 series of local bonds with CAT change of
ownership clauses. After signature of the final agreement the Company will
summon bondholder meetings and will discuss with banks to resolve this

                 Due Day   Currency Interest    Amount         Amount in CLP
New BBVA CAT     02-Aug-15 $        TAB 180 +   34,819,697,369 34,819,697,369
2010                                0.35%
Itau 2010 Bretas 07-Oct-14 $        TAB 180 +   25,000,000,000 25,000,000,000
1                                   0.45%
BBVA $70 MM 2010 07-Sep-17 $        TAB 180 +   70,000,000,000 70,000,000,000
BICE $19 MM 2010 14-Sep-16 $        TAB 180 +   19,000,000,000 19,000,000,000
RABOBANK USD 50  04-Oct-18 USD     Fixed 3.86% 50,000,000     23,369,000,000
Scotia usd100    21-Oct-17 USD     LIBOR 180 + 100,000,000    46,738,000,009
2010                                1.5%
Bank                                                           218,926,697,378
B cenc A         15-Mar-27 UF      UF + 4.25%  4,000,000      91,504,040,000
B cenc C         01-Jul-27 UF      UF + 4.1%   4,500,000      102,942,045,000
B cenc D         03-Jul-28 UF      UF + 4%     1,500,000      34,314,015,000
B cenc E         07-May-18 UF      UF + 3.5%   2,000,000      45,752,020,000
B cenc F         08-May-28 UF      UF + 4%     4,500,000      102,942,045,000
B cenc J         15-Oct-29 UF      UF + 5.7%   3,000,000      68,628,030,000
B cenc K         01-Mar-14 $        7%          30,000,000,000 30,000,000,000
B cenc L         28-May-15 UF      UF + 4.1%   1,000,000      22,876,010,000
B cenc N         28-May-30 UF      UF + 4.7%   4,500,000      102,942,045,000
B cenc O         01-Jun-31 $        Fixed 7.4%  54,000,000,000 54,000,000,000
Series J bonds   01-Sep-26 UF      UF + 6.5%   2,166,245      49,555,043,197
B1& B2
Bonds                                           1,958,436,421  705,455,293,197

Proforma Guidance

The Company does not expect that 2013 figures will materially change versus
the guidance provided by Cencosud in February 2013 because of this

All the figures mentioned above are based upon current portfolio. Final
figures will be determined on the portfolio at the date of closing (after the
approvals from the regulatory entities in Chile, Argentina and Brazil).

About Cencosud

Cencosud is a leading multi-brand retailer in South America, headquartered in
Chile and with operations in Chile, Brazil, Argentina, Peru and Colombia. The
company operates in supermarkets, home improvement stores, shopping centers
and department stores, always aiming to deliver the right product at the right
price to Latin America's growing middle class. In 2012, the Company listed
American Depositary Receipts (ADRs) on the New York Stock Exchange.

Investor Relations
Marisol Fernandez Leon  Natalia Nacif
IR Manager  IR Analyst
Phone +562 2959 0545  + 562 2959 0368

Email ir@cencosud.cl
Website www.cencosud.com

[1] All the figures mentioned above are based upon current portfolio. Final
figures will be determined on the portfolio at the date of closing (after the
approvals from the regulatory entities in Chile, Argentina and Brazil).

SOURCE Cencosud

Website: http:///www.www.cencosud.cl
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