January 27, 2021

Letterone believes that Dia can open between 500 and 1,000 stores between five and ten years

Letterone believes that Dia can open between 500 and 1,000 stores between five and ten years


L1 Retail, the retail division of LetterOne, a company controlled by Russian investor Mikhail Fridman and owner of 29% of Dia, is committed to the growth of the supermarket chain in Spain where it sees the possibility of opening of between 500 and 1,000 stores in a period of between five and ten years.

This has been indicated to Europa Press Stephan DuCharme, managing partner of L1 Retail, who has been surprised by the intention of the board of directors to carry out the closing of more than 600 unprofitable stores in Spain and the ERE that will affect more than 2,000 employees.

«If Dia grows, there is employment. Sales per square meter are one third of those of Mercadona, there is a possibility of growing generating more sales per square meter », explained the manager, who has not ruled out" very selective "closures of those stores that do not work.

The intention of the company controlled by Fridman is to set the new commercial model of the supermarket chain in an estimated period of between twelve and 18 months and then test it in about 20-30 stores and then expand it to 200 establishments progressively.

In his opinion, there are two models of growth for Dia: with existing stores, improving sales per square meter in a "significant" manner and with store openings once the commercial model is correctly manufactured in order to export it to other countries such as Argentina and Brazil.

In this sense, DuCharme has reiterated the character of "long-term investor" of LetterOne and sees possible a "reasonable" agreement with the creditor banks, asking them to become "long-term" financial partners, discarding the possibility of one request a debt reduction.

«We have never asked for a remover and we do not intend to do it, because the proposed business plan does not require a withdrawal, "said DuCharme, who has specified that his request focuses on the extension of the entire debt until 2023, which will give the time necessary to develop the transformation plan.

As explained by the manager, the capital increase should not mean giving money to banks at this time, because "the important thing now is to save the company." In his opinion, the best way for Dia to repay its debt with the banks is to implement the transformation plan proposed by LetterOne, something that requires a time of between three and five years.

In particular, the capital increase proposed by LetterOne of 500 million euros includes a minimum of 200 million for the company and 300 million for the bonds that expire in July, while that of the council for an amount of 600 million, as explained by DuCharme, focuses on 100 million euros for the supermarket chain, 200 million for banks and 300 million for bondholders.

Looking to the shareholders' meeting of Dia, which will be held on March 20, DuCharme has stated that they are holding talks with the board of directors to analyze proposals, but has made it clear that LetterOne "has its principles and structure so that Dia work ».

"There is no war, we are talking about business," said the managing director of L1 Retail, who has supported the proposal to sell Clarel, something that the board raises, to invest the money in the company.

It will not raise the price of the opa

"We still believe in the investment in Dia, in which it is convenient to continue investing, in the potential of the company despite the fact that the financial situation is not the same as it was two years ago; we want to invest more money in Dia if we direct it, "said DuCharme, who pointed out that the success of the OPA means control of the company and has ruled out raising the price of 0.67 euros offered. "The price is very reasonable with a very relevant premium," he said.

Likewise, DuCharme sees "winning" the expansion proposed by LetterOne, for which it is seeking the support of shareholders in Madrid and London, but has warned that if the board of directors goes ahead, the "dies" bid, with the withdrawal of the company controlled by Fridman.

"We are not willing to put more money in the company without having control," said DuCharme, who also pointed out that in the case of not going ahead with any of the two extensions, the takeover takes its course. "It is important that the tender concludes soon, we work very closely with the CNMV," said the manager of LetterOne.


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