December 28, 2018 / 3:06 PM / 6 months ago

Spain's Dia says close to sealing 200 mln euro funding deal

Dec 28 (Reuters) - Struggling Spanish food retailer Dia expects to reach a deal soon to refinance its banking debt, the company said on Friday, making its shares jump by over 10 percent.

The deal, to be sealed by the end of May, should provide the low-cost supermarket chain with much-needed new liquidity worth about 200 million euros ($229 million), it said in a statement.

The information comes two weeks after Dia entered into a standby underwriting commitment with Morgan Stanley under which the bank would buy troubled retailer’s shares for an amount of at least 600 million euros once shareholders approve a planned capital increase.

The company also announced the decision to appoint a new chief executive officer, with director Borja de la Cierva replacing Antonio Coto, effective immediately. Earlier in December, all the representatives of Dia’s biggest shareholder LetterOne resigned from its board of directors.

Dia, which earlier this month dropped out of Spain’s blue-chip index Ibex35, also confirmed that it contemplates the sale of the Clarel and Cash & Carry (MAX Descuento) businesses, as they are not part of the core business.

Dia shares, which have shed almost 90 percent of their value this year, jumped after trading was resumed in the afternoon following a suspension earlier in the day, and were up 11 percent at 0.4885 euros at 3:40 p.m. (1440 GMT).

$1 = 0.8725 euros Reporting by Anita Kobylinska, editing by Andrei Khalip

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