Make DIA Supermarkets Great Again

r/wallstreetbets - Make DIA Great Again

A great investment opportunity. DIA, an ex-IBEX-35 company, has completed successfully its capital increase to make the company debt-free. Last year it signed a long-term partnership with Amazon to be its official grocery distributor and the results should be reflected in the next financial results (deadline September 30th, but it’s expected be announced sooner).

Ticker: DIA (Distribuidora Internacional de Alimentación SA)

Cheers

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I requested this stock a while ago and was glad when it was added. :slight_smile:
I am glad to see that there are others interested :smiley:

I looked into it and it seems fairly valued, with a fairly large debt, although the debt is likely to have come down a bit with the debt conversion from Letter One.

The main concern I see is… How do retail investors know if the current owner, Friedman, is trustworthy?
The latest conversion was not too bad, with his ownership kept around 70-something percent, but he could decide to dilute retail investors again to increase his share of the ownership…

What are your thoughts @Trendingstocks ?

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Hi @EquityInvestor,

At this moment, I don’t think he will dilute retail investors again… but a takeover and delisting of the stock… that could happen, and therefore we wouldn’t benefit from the company’s recovery as expected. Be that as it may, this is the best moment to invest in the stock because if the financial results are better than expected, the rally could be frenetic, and those who participated in the capital increase won’t sell below 0,02.

Cheers

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What’s the history of how the company got to where it is today, and why do we think it’s on course for recovery?

Hi @Dougal1984 Bad management was the cause, then LetterOne with Fridman bought what is today up to 78% of the company and put in charge the exCEO of the successful Russian supermarkets X5 Retail Stephan Ducharme in May 2020. I’m long with 4.5K expecting a recovery as numbers seem to be improving (a takeover could be expected as well, he only needs 17% more to delist the stock from the market). They’re now expanding the online business with Amazon, now available for more than 10 Spanish cities.

Cheers

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Thanks, I’ll request permission to trade and do some research over the weekend to get a view to opening a position. I do like recovery plays, and at 0.02EUR could get a lot of shares :laughing:

I’ll be honest, it’s a risky trade, but the reward would be high as well. The key is the amount invested, and if things get hot, it can be very volatile, especially when they release the upcoming financial results.

Cheers

Hi @Trendingstocks ,
I have been looking at DIA again, and I can’t find any data with the updated accounts following the debt conversion, capital raise and the deferring or refinancing of debt since end of 2020.

Do you by any chance know what the total liabilities are currently, roughly? (“Total pasivos corriente” + “total pasivos no corrientes”)

I estimate it to be around 300 million of debt which considering cash could even mean a net debt of 0, however they have had a lot of movement in recent months so I am a bit uncertain.
At the end of 2020 they had total debt of about 1.05 billion euros, but they have since renegotiated debt, converted some to equity and raised more capital (about 1 billion between debt conversion and equity raise, which pretty much cancels the debt)… Do you have any thoughts?
I just want to know if my rationale is or is not correct, as I cannot find any updated accounts. Net debt of 0 sounds quite positive for such a struggling business.

Also, according to the 2020 presentation I understand that debt has been pushed back to 2025 and beyond.

Relevant figures, it seems like everything is in spanish:


https://storage.googleapis.com/diacorporate/2021/02/2020.02.25-DIA-FY20-Presentación-de-Inversores.pdf

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Hi, sorry for the delay, yes 300 M of debt. I have some news on this, financial results next Wednesday 15th. Here is a recent article: Dia cierra su reestructuración global tras refinanciar la deuda con la banca
You’ll need to use a google translate :sweat_smile:

Cheers

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