The irruption of the Russian tycoon Mijail Fridman in Dia on July 28 of last year was celebrated on the Stock Exchange with an escalation of 15% for the distribution group and a historical maximum of 6 euros per share. Then, the distribution group was worth more than 3,700 million and had everything in favor. That investor and eight other large managers now register latent losses for more than 1,100 million.
Not a year and a half later, Dia has been bled with a fall of 91.7% in the market – now worth 306 million – has restructured its top management until the exhaustion, has corrected its accounts and has launched a notice to sailors. Its EBITDA this year will be a maximum of 400 million, compared to 568 in 2017. Financial sources also indicate that this line of the income statement will be placed in the lower part of the range announced on October 15, which started from the 350 million. The sources consulted anticipate some 360 million, which will trigger the ratio of net debt -1,422 million at the end of September-against the ebitda until the environment of 4 times, well above the commitment of 3.5 times agreed with the bank.
Fridman has bought 29% of Dia at prices well above its current price. In its first acquisition, it paid more than 5 euros per share and 3.64 in the execution of the last derivative, on October 19. The average price is 4.3 euros per share, when it ended on Friday at 0.5002 per share (see chart). Thus, their latent losses are 690 million euros.
Along with Fridman, in the ranking of the biggest losers appear large foreign managers, with percentages between 0.5% of the US CI Global Investments and 4.3% that also controls the US Vanguard, according to Bloomberg data. In between are the Canadian CI Investments (3.8%) and Black Creek (3.0%), the Scottish Baillie Gifford (2.4%), the American LSV Asset Management (2.9%), Dimensional Fund Advisors ( 1.7%), and the largest manager of the planet, BlackRock, with 1.5%. These eight companies register a joint loss of around 460 million euros compared to the current price of the distribution group.
Financial sources predict that the ebitda will be 360 million this year, the lower part of the last reported range
The stock market nightmare of Dia has ceased, at least for the moment, after the announcement of a rescue plan on December 12. He told the CNMV that he has signed an assurance agreement with Morgan Stanley to launch a capital increase of 600 million before the end of the first quarter of 2019. He also confirmed an open secret: he has put his Max Discount and retail chains on sale. Clarel. It expects to obtain up to 300 million for these divestments, but financial sources warn that right now the market is saturated, with the possible divestments of Eroski, which also negotiates its refinancing, in the spotlight.
The shield of the pre-insured extension gives stability to the company, but is subject to the creditors reopening the tap of liquidity. Since the beginning of October, Santander, BBVA, Deutsche Bank, Sabadell and CaixaBank have canceled more than 200 million euros of confirming lines (in essence, financing to make payments to suppliers), in such a way that the liquidity buffer that they had Day has been volatilized, how he published CincoDías on November 30and. At the end of June, the latest data available, had a total of 586 million in this type of credits of which had used about 370. That is, the 200 million withdrawn have eaten the margin.
The amount of the refinancing will be around 900 million euros and will include liquidity for the short and medium term, including the confirmed confirming lines, in addition to a more flexible maturity schedule. The creditors include BBVA, Santander, CaixaBank, Bankinter, Barclays, BNP Paribas, Commerzbank, Deutsche Bank, JPMorgan, Mediobanca and ING. The great urgency of Dia is the payment of 305.7 million euros in bonds that expire next July. Its price, which had fallen to a minimum of 54.8% of the nominal, stood Friday at 77.5%. The bank has signed the consultancy FTI Consulting. The legal issues will be handled by Linklaters and Dia has relied on PwC and Rothschild.
Collapse. From the maximum of 6 euros per share reached in July 2017, Dia plummets 91.7%. Bearish investors have made gold with the fall. Since February 2015, the food group has been very exposed to hedge funds that bet against the company on the stock market. That month, shares rose by 5.2% of the capital. But they reached the record of 24.5% just the day that Fridman announced his entry into the capital. After the sharp falls in recent months, some of the hedge funds have decided to cash in and have closed positions: bearish have gone from 20.8% in September to 14.7% today.