January 21, 2021

The Letterone Fund: "If the Opa does not come out, we will not lose more time in Dia" | Economy

The Letterone Fund: "If the Opa does not come out, we will not lose more time in Dia" | Economy



The Letterone Fund, owned by the Russian Mikhail Fridman and Maximum shareholder of the supermarket chain Dia, is confident that his plans to take over the company with a takeover and then recapitalize it with 500 million euros will go ahead. This was stated on Wednesday by Stephan DuCharme, the head of L1 Retail, the retail subsidiary of the fund, in a meeting with EL PAÍS. But if his proposals were rejected at the shareholder meeting to be held on March 20, Letterone "would stop wasting time in Dia". That does not necessarily mean that they would get rid of that participation, but they would consider it insignificant and they would dedicate themselves to "other investments", giving up the one of Dia or perhaps hoping that in the long term something could be recovered.

However, DuCharme believes that Letterone will be able to convince shareholders that the best they can do is go to the OPA presented in February by the chain that currently runs Borja de la Cierva. That is what he is embarking on these days, in clarifying the shareholders' plans, as he has said, against the "misleading" information disseminated by the board of directors led by De la Cierva. "There are two extensions on the table [la de Letterone y la del consejo]It is important that shareholders compare the two carefully and we have the impression that there is very little information about the board, "he said." Is it real, is it guaranteed? I think the company owes a response to shareholders, "he says.

But the possibility that their clarifications do not convince the shareholders and that they are inclined in the board by the plans of the council -extension of capital of 600 million and rescue plan- is on the table. What would happen then?

– "If the council's plan is supported, the takeover is dead".

– And what would they do then?

– In that case, we're leaving.

– Would they sell their participation?

– No. Going out and selling participation are two very different things. We have a 29% stake, which is lost by 90% (due to the stock market crash of that percentage of Dia in the last quarter of 2018). For us and all the shareholders. We will stop wasting time on this. I have a team, we have other investments, we have used all our time in Dia.

– But they would still have 29%.

– Yes, but it's something that would not be worth much, so …

However, DuCharme trusts that the takeover will go ahead and then, will proceed to the capital increase by 500 million. The person in charge of the retail branch of Letterone explained that of those 500 million, 200 would go destined to the plan of reflote of the company, designed for five years. The other 300 would be dedicated to repaying the bond issue of 306 million that expires in July of this year. In any case, he said that there is the possibility of "refinancing" those bonds with their holders, or exchanging them for new bonds with another expiration date, so that those 300 million would also be invested in the company, as well as what is taken out. from the sale of the Clarel perfumeries or Max Discount wholesale supermarkets, which are for sale.

Against this, argues that the plan of the council, which aims to expand capital by 600 million, would only devote to refloating the company 147 million, "much less", while the rest of the money would be to amortize debt and bonds that expire in July .

In solution

It also played down the fact that Dia is in a technical bankruptcy situation due to closing the year with a negative equity of 166 million. "It's a purely accounting problem," he said. In this situation, the company has two months to convene a meeting of shareholders, which has already done, but even if that situation persists after the meeting, explained that a new period of two months is open at the end of which could be requested to a judge a "moratorium" (the pre-contest of creditors) of another four months to solve it. In any case, he said he has proposed to the council a battery of "accounting solutions" that he did not want to detail. And even, he said, part of the bank debt could be converted from senior to subordinated temporarily, for a month. "There are different mechanisms, it is important to discuss them, we have made some proposals to the council, "he said.

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