Éxito Announces Delisting Plans and Future Operations Strategy

Éxito Plans Strategic Delisting from the NYSE

Almacenes Éxito S.A. (BVC: EXITO; NYSE: EXTO; B3: EXCO32), a prominent retail company, has officially announced its intention to delist its American Depositary Shares (ADSs) from the New York Stock Exchange (NYSE). This decision follows the approval from the Company’s Board of Directors and is seen as a pivotal shift towards enhancing its operational efficiency.

Reasons Behind the Delisting Decision

The reasoning for this voluntary delisting of the ADSs, each representing eight common shares, is not rooted in cost-cutting or compliance issues. Instead, the Company aims to streamline its operations and focus its float primarily in the Colombian market, which allows for increased liquidity and maximized returns for all shareholders.

Market Considerations and Free Float

Currently, Éxito's reduced free float stands at just 13.2%, a figure that highlights the dispersion of its shares across various countries, including 1.6% in Colombia, 1.6% in the United States, and 10% in Brazil. By concentrating its shares in its home market, the Company anticipates fostering a more effective market structure for its stakeholders.

Timeline for the Delisting and Future Actions

The Company has outlined a clear timeline, intending to file a Form 25 with the U.S. Securities and Exchange Commission (SEC) by the end of December 2024. This will officially initiate the delisting procedure for its ADSs from the NYSE, with trading expected to cease approximately on January 9, 2025. After this date, investors will no longer find Éxito's ADSs on the NYSE platform.

Impact on ADS Program

Along with the delisting, Éxito has instructed JPMorgan Chase Bank N.A. to terminate its ADS program, effective January 21, 2025. During the interim period, the ADSs may still trade over-the-counter, providing a limited opportunity for investors to manage their holdings before the program concludes.

Future Trading and Compliance Plans

Despite the delisting from the NYSE, the Company’s common shares will continue to be available on The Stock Exchange of Colombia (BVC). Éxito is committed to adhering to its disclosure obligations as a listed entity on the BVC, ensuring that shareholders remain informed and engaged.

Evaluation of Brazilian Operations

As part of its strategic review, the Company is assessing its performance as a foreign private issuer in Brazil. It is exploring options for its Brazilian Depositary Share (BDR) program and promises to keep shareholders updated as new information becomes available.

Future Reporting Obligations and Deregistration

Once the delisting is effective and all deregistration criteria are met, Éxito plans to file a Form 15F with the SEC. This step would suspend all reporting obligations under the Exchange Act, effectively reducing the regulatory burden on the Company.

Commitment to Transparency

Even after filing Form 15F, Éxito will continue to comply with essential reporting practices in accordance with Rule 12g3-2(b) of the Exchange Act. This will include regular updates on their corporate website, ensuring ongoing transparency with stakeholders.

Understanding Forward-Looking Statements

As is common with significant corporate announcements, there are forward-looking statements associated with this announcement. These statements are projections based on current management beliefs and may be subject to risks that could alter actual outcomes.

Frequently Asked Questions

What is the reason for Éxito's delisting from the NYSE?

Éxito's delisting decision is primarily focused on improving operational efficiency and concentrating its float in the Colombian market to enhance liquidity and shareholder returns.

When will the delisting become effective?

The delisting is expected to take effect approximately on January 9, 2025, following the filing of Form 25 with the SEC.

What will happen to the ADS program?

JPMorgan Chase Bank N.A. will terminate its ADS program on January 21, 2025, after the completion of the delisting process.

How will shareholders be informed of future developments?

Éxito commits to ongoing communication with shareholders through mandatory disclosures on its corporate website and compliance with the BVC's regulations.

Will Éxito continue trading elsewhere after delisting?

Yes, Éxito's common shares will still be traded on The Stock Exchange of Colombia, ensuring continued access for investors.

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