Dia will decide its future on March 20

Dia will decide its future on March 20

The company will propose at the shareholders' meeting a capital reduction and a subsequent extension of 600 million euros

  The supermarket chain Dia has already set the date for the most decisive shareholders meeting in its history: it will be next March 20, on second call, when "foreseeably" will be subject to deliberation and eight matters relevant to the company will be voted, such and how it communicated yesterday to the CNMV. But for the most part the debate will revolve around the proposal to reduce capital in order to compensate for losses and the subsequent expansion of 600 million, secured by Morgan Stanley, which will serve to strengthen its funds.

It is "the only realistic solution, to date, to restore the balance of assets and to comply with all the commitments assumed by the Group," said Borja de la Cierva, CEO of Dia, in a statement.

  Specifically, the distribution group will propose to its shareholders to reduce the share capital by 56,021 million euros, that is, from 62,245 million to 6,224 million, by reducing the nominal value of all the shares: from 0.10 euros to 0.01 euros per title.

This capital reduction will be accompanied by the announced capital increase of 600 million, which, however, does not have the backing of the company's main shareholder, the Russian billionaire Mikhail Fridman, who controls 29% of the firm through the Letterone company and which offers as an alternative a voluntary takeover bid on the company, of 0.67 euros per title, and, if it is successful, a capital increase of 500 million.

2,100 layoffs
The company is immersed in a crisis that worsened after the presentation of the results of last year, in which it recorded losses amounting to 352.6 million, compared to the 101 million profits it obtained in 2017, so entered into technical bankruptcy or "cause of dissolution". This is a consequence of the fact that sales fell by 11.3% to 7,288 million euros, registering declines in all the countries where it operates (Spain, Portugal, Brazil and Argentina). EBITDA (profit before taxes, amortization, interest and depreciation) fell by 47.8% to 246 million euros.

Therefore, Dia announced the dismissal of 2,100 workers, 8% of its workforce in Spain, while, in order to improve the profitability of the company and adjust the cost base, will close more than 600 stores not profitable in Spain, of which 300 will be closed this year.