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(Adds comments on sale, background, share move)
By Felipe Iturrieta
SANTIAGO, July 11 (Reuters) - Latin American retailer Cencosud said on Monday it would sell a 5 percent stake in the company via a share offering, which a source said was designed to shore up finances.
The retailer, which is headquartered in Chile and has operations throughout South America, is controlled by Chile's Paulmann family, which currently owns about 57 percent of the company, according to Thomson Reuters data.
Cencosud said in a statement the shares would be offered in Chile as common stock and abroad as American Depositary Shares. The block of around 142 million shares is expected to be priced around July 15, with Cencosud founder and President Horst Paulmann making a presentation to investors in Santiago, Sao Paulo, London and New York.
The stock was trading at 1,818 pesos per share on Monday afternoon, down nearly 4 percent on the day, which would put the value of the 5 percent stake at around $400 million.
The statement said the company would not receive any of the proceeds, but did not give any reasons for the sale.
But a source with knowledge of the operation told Reuters that the move was aimed at boosting the Paulmanns' finances. It would take some pressure off Cencosud as the owners "have quite a lot of debt," the source added.
Originally from Germany, Horst Paulmann opened his first supermarket in Chile in the 1970s and built Cencosud into a retail empire, and is now listed by Forbes as the second-richest person in Chile.
Cencosud runs the Jumbo supermarkets, Paris department store and Easy home improvement store brands, among others, and has significant operations in Chile and Argentina, with a presence in Brazil, Peru, and Colombia. ($1 = 658.60 Chilean pesos) (Reporting by Felipe Iturrieta, additional reporting and writing by Rosalba O'Brien; editing by G Crosse)