Dec 31 (Reuters) - Spanish low-cost supermarket operator Dia on Monday said it had signed a series of deals for a total of 896 million euros ($1.03 billion) to refinance its debt and get much-needed liquidity.
Dia in return committed to go ahead with a capital increase of at least 600 million euros and to continue the divestment procedures for its Clarel and Cash & Carry (MAX Descuento) businesses.
The retailer has faced a steady erosion of market share in Spain over the past five years as the country’s economic recovery softened the edge it enjoyed with bargain-hungry customers during recession. Its shares dropped by nearly 90 per cent in 2018.
Dia said in a statement that Monday’s financing deals, signed with investors it did not name, included short term liquidity of up to 215 million euros as well as financing of up to 681 million euros through working capital financial instruments.
It said the financing matures on May 31, 2019, except for various tranches of minor amounts with maturity dates in 2020 and 2022.
Dia’s net debt reached 1.42 billion euros at the end of September 2018. The company dropped out of Spain’s blue-chip index Ibex35 earlier this month.
Dia said it would not be able to distribute dividends to its shareholders without the consent of the banking entities subscribing to the financing agreements, as long as its debt with them is not settled.
$1 = 0.8738 euros Reporting by Anita Kobylinska Editing by Ingrid Melander