April 16, 2021

Dia loses 352 million in 2018 and is in a technical bankruptcy situation | Economy

Volatility takes over the price of Dia | Economy

The supermarket chain Dia closed its worst year with losses of 352 million, compared to the profits of 109 last year, and a negative net worth of 166 million, that is, in a situation of technical bankruptcy. Sales also fell by 11.3% to 7,288.8 million, compared to 8,217.6 last year (in its day it reported 8,620.6 million). The chain is immersed in a serious financial and business crisis and the board of directors, led by Borja de la Cierva, and the largest shareholder, the Letterone fund of the Russian tycoon Mikhail Fridman dispute control of the company and intend to refloat it with separate plans that include capital increases of 600 and 500 million, respectively.

As the chain itself anticipated in October, the results are very bad, probably worse than what was seen when then launched a profit warning drastically cutting its forecasts. It was intuited then that the chain would enter losses, but the amount was not known. This has finally been 352.6 million euros, a chasm compared to 109 million that he said he won in 2017 (this year's accounts re-express that figure and leave it at 101.1 million).

The remuneration of the council is doubled

It also recorded a significant drop in sales, up to 7,288.8 million, 11.3% less than a year ago. Between the fall in income, the losses and the provisions that he had to make due to asset deterioration, as he warned in October, his net worth is now negative, by 166 million, which puts the company in a situation of technical bankruptcy and in need of an injection of money to turn that figure around. For the moment, it has the support of creditor banks, which have guaranteed liquidity until May. But it does need a capital increase. The current board has in mind one of 600 million, secured by Morgan Stanley, which must be approved by the shareholders' meeting, scheduled for March.

Shareholders will have to choose between this plan and that of the Letterone fund – absent from the board since December despite having 29% of the shares -, which plans its own, of 500 million as conditioned to the success of a voluntary takeover by 70 , 9% of shares you do not have.

In a convulsive year, the worst crisis in the history of the company, the chain doubled the expense in council remuneration. Of 2 million euros that were distributed to the directors in 2017, it has risen to almost four million (3.97). The reason is in the compensations, departure that amounts to almost two million. Probably, it is due to the compensation paid to the ex-board member Ricardo Currás, who was fired in August, in a move that augured the storm that followed. Later, already at the end of December, he also fired Antonio Coto, who had succeeded Currás.


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