U.K. Retailer Tesco PLC Considers Up To US$7 Billion Sale of South Korea Operations--Sources

By P.R. Venkatand Rick Carew 

U.K. retailer Tesco PLC is considering a sale of its South Korea retail operations, potentially raising up to $7 billion dollars to fund its turnaround efforts, according to people familiar with the situation.

Tesco has hired HSBC Holdings PLC to manage a process to sell the retail operation, which is expected to receive interest from private-equity firms, these people said. A sale would jettison a big chunk of Tesco's global operations after a series of blunders at the U.K. retail chain including an accounting scandal, massive write-downs, and upheaval in its management ranks.

It could be a considerable deal for private-equity firms in Asia, as South Korea's banks have shown a willingness in the past to write big checks to finance acquisitions of strong cash-flow-generating businesses like retailers.

Bankers and investors have kept a close watch on Tesco's Asia operations, which are substantial in markets including South Korea, Thailand, and to a lesser extent Malaysia. Tesco vies with Carrefour SA of France for the position of world's second-largest retailer by revenue behind Wal-Mart Stores Inc.

Write to P.R. Venkat at [e-mail] and Rick Carew at [e-mail]

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