Report: LetterOne warns Dia’s owners of risks of restructuring threats

MADRID, Mar 29 (PRIME) -- LetterOne of Russian tycoon Mikhail Fridman has warned shareholders of Spanish retailer Dia that they would share a significant risk of company restructuring if they don’t approve the sale of the retailer to LetterOne, El Pais daily reported on Friday.

In February, LetterOne said it would raise its stake in Dia to 100% paying the shareholders 0.67 euros per security, or a total of 296.1 million euros. LetterOne also planned to invest 500 million euros in Dia’s equity under the deal. The European Commission approved the deal on March 13.

Pais reported quoting LetterOne’s public offer that the company warned shareholders unwilling to sell their stakes of sharing a significant risk of planned restructuring, which does not guarantee success and which would need several years to show any results. The restructuring plan does not encompass Dia paying any dividends in the next few years, the daily reported.

If LetterOne fails to buy at least half of Dia’s 71% it does not own, the retailer would default on its liabilities and would have to announce bankruptcy. According to Pais, Fridman’s company is negotiating a debt repayment postponement until 2023 with the major creditors of Dia – Banco Santander, BBVA, Barclays, JPMorgan, and Societe Generale.

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