Spain's DIA announces 1 bln euro plan to convert debt into equity and issue new shares

MADRID, March 25 (Reuters) - Spanish supermarket group DIA said on Thursday it has agreed to convert debt owed to its main shareholder LetterOne into equity and will additionally offer new shares to existing shareholders for a total 1.028 billion euros ($1.21 billion).

The company plans to convert 769 million euros it owes to LetterOne into shares worth the same amount and will offer its existing minority shareholders up to 269 million euros worth of new shares.

The agreement replaces a previously planned 500 million euro debt-to-equity conversion announced in November and will enable DIA to reduce debt and allow the management to focus on execution of the company’s business plan, it said.

The debt-laden Spanish retailer has benefited from customers shopping more frequently at its neighbourhood stores during COVID-19 lockdowns and restrictions on movement.

Last month, DIA reported that its net loss narrowed to 364 million euros in 2020, compared to 791 million euros in 2019.

$1 = 0.8465 euros Reporting by Inti Landauro; Editing by Susan Fenton