Spanish supermarket chain DIA, controlled by Letterone, has secured €350 million in new financing as part of its efforts to refinance debt worth €885 million.
The financing has been provided by a group of European banks, including Société Générale, Santander, BBVA, and CaixaBank, as well as North American funds, according to Spanish daily Cinco Dias.
Out of the €885 million in the refinancing agreement, DIA will use €755 million for the early settlement of a 2018 syndicated loan and bonds issued in 2017. The remainder will be used to repay other debts, including a €7 million bilateral loan.
The new financing is structured as 40% bank debt and 60% from American private investors, with loan terms ranging from three to five years.
The agreement restricts DIA from paying dividends or engaging in financial dealings with Letterone, which owns 77% of the company, without creditor approval.
It also increases available credit and removes the need for creditor approval on asset sales like those recently completed in Brazil and Portugal.
The parties involved did not disclose additional details.
Strategic Plan
DIA will present its strategic plan to investors in March of this year. It is planning a reverse stock split to consolidate shares and increase their nominal value. Letterone has expressed its continued support for DIA and its growth strategy.
In an interview for Cinco Dias, Letterone CEO Jonathan Muir stated that the Luxembourg-based investment fund, despite challenges stemming from sanctions against some of its founders due to alleged ties to Russia, is well-positioned for growth.
He emphasised that Letterone takes a long-term approach to investments and is interested in expanding its portfolio in Spain, citing the country's strong economic performance and positive experience with Spanish partnerships.
Beyond its current retail holdings (including DIA), Letterone is targeting investments in energy transition, healthcare, and real estate.
Muir expresses confidence in DIA's turnaround, citing the recent refinancing agreement as a positive sign. He confirms Letterone's intention to maintain its current 77% stake in DIA and highlights the fund's €8 billion in liquidity available for new investments in Europe and the Middle East.
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