For the second time in just four months, the supermarket chain Dia change of boss. The deep crisis that the company is going through, which has placed it in a situation of negative net worth, has claimed on Friday the head of Antonio Coto, who had replaced Ricardo Currás in August, as reported by the company through a Relevant event submitted to the CNMV. Borja de la Cierva will replace him in front of the council, which includes Jaime García Legaz, former president of Aena, and Miguel Ángel Iglesias Peinado. The company also informs that it is about to close with the creditor banks an agreement to refinance its debt, which contemplates a liquidity line of 200 million to continue operating and a capital increase of 600 million. In addition, it reviews its accounts and admits that, as a result of the deterioration of some assets, it is in negative net worth. The chain, which has been suspended from trading, has returned with an increase of more than 10%.
In the relevant event, the company does almost a review of the crisis it is going through, the biggest in its history, which has even endangered its survival. In the first place, it ensures that "there is an understanding", only pending signature, with the creditors to refinance the debt, which exceeds 1,400 million euros, until May 2019. This agreement contemplates a line of "new liquidity" for 200 million to deal with day-to-day operations and the approval by shareholders of a capital increase of 600 million euros, announced a few days ago. In addition, it leaves the covenants (commitments acquired with the banks regarding the debt). It also confirms that it is selling the Clarel perfumery chain (1,271 stores) and the 35 hypermarket stores for Max Discount wholesalers, "which are not part of its main business", as another way of obtaining income.
The rumors about an alleged agreement already almost settled with the bank began yesterday afternoon and, in fact, the titles skyrocketed at the end of the session on Thursday, marking a rise of 22% (in a negative day for the stock market in general ), up to 0.44 euros per share, following an escalation that began at 3:30 p.m. The company, despite this pull, has accumulated a 90% drop in the market so far this year. Its total capitalization on the stock market is now only 269.7 million euros. On their return to the market, stocks continued to climb, climbing more than 10%.
Second, the company admits that its growing debt and certain assets that have not been properly accounted for have placed it in a negative equity situation. This situation comes after having performed some impairment tests on some assets. These tests have resulted in a negative result of 110 million euros (47 in goodwill and 63 in tangible fixed assets). In any case, it is a provisional figure as of September 30, so Dia will have to calculate it definitively on December 31 to provide it in the annual accounts. In addition, the company admits an impairment of 184 million in deferred taxes that will also have to be provisioned. "The allocation of the aforementioned provisions will result in a negative equity at the close of the 2018 fiscal year," admits Dia, affirming that this situation will be reversed with the capital increase. As of June 30, the day's net worth was 190 million. Despite all this and other revisions, it maintains that, at the end of 2018, its operating result will amount to between 350 and 400 million.
Finally, Dia gives an account of the remodeling of the dome. Antonio Coto, who acceded to the post of CEO at the end of August to replace Currás, has been "ceased" just four months later. His position will now be occupied by Borja de la Cierva, formerly of Inditex and El Corte Inglés. In addition, Jaime García Legaz, former Secretary of State for Commerce and president of Aena, who had sounded these weeks as president (this position is not an executive in Dia and currently is held by Richard Golding), enters the board.
Both enter the council in replacement of Karl-Heinz Holland and Sergio Dias, representatives of the LetterOne fund, the company's top shareholder with a 29% stake and owned by Russian tycoon Mikhail Fridman, who they left the council a few days ago for disagreements with the salvage plan designed by Coto and its directors. His resignations were added to that of the president, Stephan DuCharme, also representative of LetterOne, whose excuse to leave was to "work from outside" in the company's rescue plan.
The supermarket chain has lived a year more than turbulent. The first clear signs of the crisis began to appear in February. Fridman had just done with 25% of the titles when the company presented its results for 2017: gained 37% less due to the sales drop in Spain. The results until March were even worse. Since then, it has gone downhill, which cost Currás the job. Fridman increased its participation to 29% and recovered on the stock market, with the prospect of a possible takeover. However, in October the company announced that it was reducing its forecast for 2018 results. And the blow on the floor was a record: it fell 42.2% in one day. The falls have happened since then, exacerbated after rating agencies will lower the note to junk bond. The stock market and financial deterioration cost Dia his position in the Ibex, which he left definitively last week.