White Fumata between the bench to grant a rescue table to Dia. The creditors have finally agreed to refinance up to 896 million of the 1.4 billion in financial liabilities with which the supermarket chain counted as of September 30. They do so until March 2019 and according to certain conditions, after obtaining the yes from one of the 12 banks that delayed the decision until Monday morning.
In addition to an oxygen balloon for the company, the pact with the bank somehow protects Dia from the risk that its main shareholder, the Letterone fund of the Russian tycoon Mikhail Fridman will try to take advantage of the Dia crisis to launch a public offering of acquisition at the price of balance, take control of the company and negotiate from a position of greater power the refinancing of the debt.
The agreement between the company and the bank allows it to have up to 681 million in circulation lines and to pay suppliers, who withdrew it between October and November of this year. The entities had decided weeks ago to return these lines of liquidity to the company and negotiated the last fringes to refinance longer-term debt packages, according to Cinco Días on December 27. Finally, Dia has achieved 215 million more in different sections and with expirations that arrive until 2020 and 2021.
However, the agreement does not come free to the company, but the banks have demanded a series of conditions. The first is to carry out a capital increase of 600 million in the first quarter, which the company announced earlier this month that it had the Morgan Stanley pre-insurance. The problem is that its maximum shareholder, the Letterone fund, has already shown its rejection of this plan and was preparing to launch an offer precisely for the month of March, at which time it could submit a bid at the balance price.
Room for maneuver
Linking the refinancing of the company to the planned capital increase reduces, for that reason, Fridman's margin of maneuver.
In the communication sent to the CNMV it is explained that in the refinancing "the assumptions of anticipated expiration usual in this type of operations have been agreed". Market sources point out that among those usual assumptions is the change of control. In addition, "it has been agreed as an event of default the breach by the company of its obligation to promote during the first quarter of 2019 a capital increase with preferential subscription rights of shareholders, which would allow it to increase its own funds by a minimum amount of 600 million euros prior to the ordinary maturity of this financing ", set for May 31 next.
So, if Fridman tries to gain control through an OPA and causes the deferral of the capital increase, the early maturity of the financing will be found, so he will have to deal with an abundant debt, which makes his plans, although it does not make them impossible at all.
The company itself has been set aside at the negotiating table. On the other, an army of banks. Santander, BBVA, Sabadell, Deutsche Bank and CaixaBank were the financial entities that provided the credit to suppliers to the supermarket chain. The bank chaired by Ana Botín, BBVA, Barclays and Société Générale make up the hard core of long-term creditors. Between both parties is a large group of investors. Dia has hired PwC and Rothschild, while banking is represented by FTI Consulting and Houlihan Lokey. The legal issues are in the hands of Clifford Chance and Linklaters.
The 900 million in bonds that the company has are left out of the process. The 300 million that expire in July are of special relevance and this will be one of the commitments that the capital increase intends to assume.