The executive chairman of Spanish retailer DIA, Stephan DuCharme, has said that a newly-agreed capital structure will provide "strong and stable capital foundations" that will help the business continue its turnaround process.
DuCharme was commenting as DIA agreed a long-term financing and capital structure solution with 100% of its syndicated lenders, which will be underpinned by 'significant support' from reference shareholder LetterOne.
It has agreed with creditors to convert debts of €500 million owed to LetterOne into new shares, as well as to extend the maturities of other debts.
Elsewhere, the retailer, which is in the middle of a transformation process, extended the maturity of a €902 million syndicated loan from March 2023 to December 2025, as well as the maturity of €300 million worth of bonds from April 2023 to June 2026.
Refinancing Risk
According to the grocery, the agreements enable DIA to eliminate refinancing risk, reduce its leverage by 40%, and establish a debt-maturity profile better aligned to its long-tern strategic requirements.
“This transformational agreement aligns all of DIA’s key financial stakeholders and provides the group with strong and stable capital foundations that will underpin the successful delivery of our business transformation," DuCharme commented.
"Our reference shareholder LetterOne has, once again, demonstrated its sustained support for DIA’s transformation journey, and has now committed over €1.1 billion of equity capital since July 2019. I would also like to thank our syndicated lenders for their support and recognition of DIA’s long-term positive trajectory."
Retail Growth
Earlier this month, DIA said that like-for-like sales across its operations were up 6.3% in the third quarter of its financial year, with average basket sales up 25.3%, as shoppers stocked up on items during the COVID-19 pandemic.
Net sales in the quarter were up 2.5% in the period to €1.68 billion, boosted by 'ongoing transformation efforts', it added.
"During 2020, the group has delivered continued positive top line and adjusted EBITDA performance," said DuCharme. "We will now accelerate the second phase of the business plan and I am confident we will make further progress in 2021 and beyond.”
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
