The board of directors of the Supermercados Dia chain has alerted its shareholders on Friday, who must meet at a crucial meeting on March 20, that the 500 million capital increase proposed by the company's maximum shareholder, the Letterone background of the Russian tycoon Mikhail Fridman, carries with it a series of uncertainties and deadline problems that can lead the company to be doomed to dissolution. Therefore, it encourages shareholders to support the plan of the board, a capital increase of 600 million followed by a plan of several years of refloating the company.
In a relevant event sent to the CNMV, the board of directors processed the request made last week by Letterone to include a new item on the agenda: that of its 500 million capital increase conditioned to achieve first success of its takeover of 70% of the shares that do not already have an agreement with the creditor banks. Including that point, forced shareholders to choose between their proposal or that of the board, a capital increase of 600 million, followed by a refloating plan similar to that of Letterone, a plan that also appears on the agenda of the shareholders' meeting, which will be held on March 20.
The problem, says the council, is that, in his opinion, Fridman's plans do not solve the problems that plague the company and, above all, are subject to plans and conditions that may end up in the liquidation of the company, which right now it is in cause of dissolution to have negative net worth. The council notes that, unlike its project, Letterone's "does not guarantee that the needs and obligations of the group in the short term are duly addressed and resolved." First, because the capital increase proposed by Fridman is subject to an OPA whose deadlines, and even result (could be rejected), are beyond the control of Letterone. These deadlines would clash with those established by law for companies in the cause of dissolution to restore their balance of assets and Fridman has not proposed "any other effective alternative to resolve" this imbalance.
In addition, the council notes that Fridman has not reported any agreement with the creditor bank, as the board has achieved, and that, therefore, if the shareholders give their approval to the tycoon, Dia could breach those agreements and the banks. Make the decision to execute the debt and take over the company. In addition, he says, those plans do not contemplate that Dia has to face a bond maturity of 306 million euros in July.
Adds the advice that the expansion of Letterone is subject to no later than July 18 of this year has been successful with its takeover and that it has taken control of the company, which, by installments, it may not have happened by then . In addition, the board notes that the conditions that Fridman puts to the banks to reach an agreement are very different from those that the board has already negotiated, which adds more uncertainty.
Finally, the current council, headed by Borja de la Cierva, denounces that the extension of Fridman "does not allow all shareholders to participate in the creation of value in the future" of Dia, since it is subject to a conditional bid in turn to achieve control of 64.5% of the shares (half of the 70% that it does not control and the 29% that it already has) and that no new shares are issued. That is, Fridman would take two-thirds of an eventual future of Dia success.
Ultimately, it highlights the diabolical situation to which shareholders may be exposed: that neither the Fridman bid nor the extension of the board (Fridman's opposition) will go ahead and that the company "has been deprived of the structure of the stable capital that needs and has to face the adverse consequences "already mentioned: unviability and dissolution.