Report
EUR 200.00
For Business Accounts Only
- Conversion of € 500 M of debt (51% market cap and ~25% of NFD’20e) into capital: € 200 M from the super-senior financing granted by DEA Finance and € 300 M from the bonds due April’21 (~97.5% were acquired by DEA Finance through a bid in August’20).
- Extension to the maturity of € 300 M also acquired by DEA Finance (89.7% of the total) in August’20.
- Early amortisation of € 35 M of super-senior loans granted by syndicated creditors, with the remaining € 36 M to be paid in July’22.
- The company expects to close the deal in April’21 after the approval of shareholders and bondholders.
On another note, the communiqué sent by the company also includes a summary of its preliminary YE’20 estimates (not quantified thus far), with € 6.3-6.6 of Bn of sales and an adjusted EBITDA margin of 1.8%/1.9% (vs. € 6.62 Bn and ~1.8% BS(e)), not meaning any surprises given the performance seen thus far.
In principle, we believe that today’s announcement is good news for the stock, as with this transaction the Group eliminates the financing risk in the short-term, while also lowering its gearing ratio (~4.3x ND/EBITDA’20e vs. ~5.7x with no conversion) and financial costs (~7%). In any event, the key will be the conversion price of the debt, which, being held by its main shareholder (L1 Retail), we believe will have the biggest discount possible, and this will mean significant share dilution for minority shareholders. Assuming a -30% discount to the current trading levels (~0.10/sh.), dilution for minority shareholders would be -43%, while L1R would increase its stake by 11% to ~86% of the share capital. Taking this conversion price as reference, our T.P. would stand at €~0.11/sh., which includes an improvement of >+15% following the company’s good performance in its 3Q’20 results (with a smaller impact from restructuring costs).
DIA: CONVERSION OF DEBT INTO CAPITAL (ANÁLISIS BANCO SABADELL)
DIA has announced that it has completed the transformation of its capital structure after reaching the following agreements:- Conversion of € 500 M of debt (51% market cap and ~25% of NFD’20e) into capital: € 200 M from the super-senior financing granted by DEA Finance and € 300 M from the bonds due April’21 (~97.5% were acquired by DEA Finance through a bid in August’20).
- Extension to the maturity of € 300 M also acquired by DEA Finance (89.7% of the total) in August’20.
- Early amortisation of € 35 M of super-senior loans granted by syndicated creditors, with the remaining € 36 M to be paid in July’22.
- The company expects to close the deal in April’21 after the approval of shareholders and bondholders.
On another note, the communiqué sent by the company also includes a summary of its preliminary YE’20 estimates (not quantified thus far), with € 6.3-6.6 of Bn of sales and an adjusted EBITDA margin of 1.8%/1.9% (vs. € 6.62 Bn and ~1.8% BS(e)), not meaning any surprises given the performance seen thus far.
In principle, we believe that today’s announcement is good news for the stock, as with this transaction the Group eliminates the financing risk in the short-term, while also lowering its gearing ratio (~4.3x ND/EBITDA’20e vs. ~5.7x with no conversion) and financial costs (~7%). In any event, the key will be the conversion price of the debt, which, being held by its main shareholder (L1 Retail), we believe will have the biggest discount possible, and this will mean significant share dilution for minority shareholders. Assuming a -30% discount to the current trading levels (~0.10/sh.), dilution for minority shareholders would be -43%, while L1R would increase its stake by 11% to ~86% of the share capital. Taking this conversion price as reference, our T.P. would stand at €~0.11/sh., which includes an improvement of >+15% following the company’s good performance in its 3Q’20 results (with a smaller impact from restructuring costs).
Underlying
DISTRIBUIDORA INTERNACIONAL DE ALIMENTACION SA
Provider
Sabadell
Arancha Pineiro
Other Reports on these Companies
Other Reports from Sabadell
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.