The market continues to punish Dia in the Stock Market after it was known yesterday that on May 31, it will take a capital increase of more than 1 billion euros to the general meeting of shareholders, double the amount initially announced, at an issue price of two Euro cents for each new share. The titles of the supermarket chain today yield 9%, to 0.0895 euros per title, after sinking 16% yesterday. In two sessions they accumulate a decrease of 25%.
The company had not traded below the ten cent barrier since the end of March last year and did not suffer a decline as pronounced as yesterday in a single session since November 2019. Bankinter’s analysis department points out that, since From a technical point of view, the value is piercing the support conferred by the base of the side of the last 13 months: 0.1020 euros. “A close below said support would be a clear sign of weakness. And all within an impeccable bottom downtrend, intact.”
The supermarket chain announced yesterday the issue price of the new shares to increase capital
Dia announced this Thursday to the National Securities Market Commission (CNMV) that it will take the new share issue to its general meeting of shareholders on May 31 as a formula to increase capital. The firm intends to receive up to a total of 1,028 million euros through the issuance of more than 51,000 million new securities with an amount each of 0.02 euros (0.01 euros of nominal value and 0.01 euros of premium issue for each new share).
Analysts relate the collapse of Dia with this operation and point out that the amount of these shares is significantly below what the market expected, since in its previous expansion -in 2019- the fixed price was ten cents. The IG analyst, Diego Morín, points out that “what has been a stick for the securities is that said increase will be double the amount of what was first announced, something that has shocked investors, since at current prices, the Dia shares would be more than 75% above their current value. “
At the end of March, the group improved the agreement it reached last November with its reference shareholder LetterOne, DEA Finance and its syndicated creditors, to further strengthen its long-term capital structure. Thus, the company will increase capital by up to a total of 1,028 million euros. Of this amount, as specified by the group, 769 million come from the conversion of debt into equity and 259 million from a cash tranche for minority shareholders who wish to attend the expansion.
The operation, which is expected to close at the beginning of the third quarter, will reduce Dia’s leverage by 60%, strengthen its solvency and improve its liquidity, according to the company, which will not have to face significant debt maturities until the end of 2025. As the group has highlighted, this operation represents a “new injection of liquidity”, which will accelerate the transformation process of the company, which since July 2019 has received more than 1,600 million euros.
Additionally, the operation includes the extension of the maturity of the syndicated loan of 902.4 million from March 31, 2023 to December 31, 2025 by the syndicated creditors. The terms and conditions of the 2023 bonds for an amount of 30.8 million euros not acquired by DEA Finance are also modified to extend their maturity from April 2023 to not before June 30, 2026.
While waiting for its quarterly results -expected for May-, the supermarket chain has already advanced that in the first quarter it registered a fall in its turnover of 7.3%, to 1,571.6 million euros, after proceeding from December to the closing of 69 supermarkets.