07 March 2019

L1 Retail requests further information on Dia's capital increase prior to general shareholders' meeting

Madrid, 4 March 2019: L1 Retail, an international investment business with proven world-class retailing and retail transformation expertise, and owner of 29% of Distribuidora Internacional de Alimentación S.A. (“DIA” or the “Company”), the Spanish food retailer, confirms that it has  requested further information from DIA with regards to resolutions proposed for the forthcoming Annual General Meeting (“AGM”).


On 27 February 2019, L1 Retail requested further information from DIA to allow all shareholders to better evaluate the resolutions proposed by the Board of Directors.  As of the date of this release, no response has been received.


1. Details on Underwriting of Capital Increase (items 6.1 and 6.2)

DIA has not provided any detail as to how it would intend to implement any capital increase authorisation it might receive under agenda items 6.1 and 6.2.  This underlines the significant uncertainty that shareholders face in supporting these resolutions.  Therefore:

  • L1 Retail has requested that DIA provide a complete list and full details of the conditions contained in the Morgan Stanley standby underwriting commitment, and with regard to each condition, confirm whether such condition has been satisfied.  This is to allow all shareholders to determine the likelihood of such an underwriting proceeding;
  • L1 Retail further requested that DIA disclose and publish any placement and underwriting agreement that has been entered into with Morgan Stanley and any other agreement, commitment or offer, subscribed or received from Morgan Stanley or any other person, related to the placement and/or underwriting of a share capital increase.

Without such information, shareholders cannot fully evaluate the certainty and viability of the capital increase proceeding.


2. Explanation as to why the Board is proposing to reduce the nominal value (item 5.2)

L1 Retail believes the Board should be transparent with shareholders that the proposal to decrease the nominal value is connected to its proposed capital increase.  Therefore:

  • L1 Retail has asked DIA to confirm that the proposal to decrease the nominal value of the shares of the Company to EUR 0.01 is not necessary for removing the dissolution cause, despite this being the rationale for this resolution put forth by the Company;
  • Furthermore, L1 Retail has asked DIA to clarify whether such decrease of the nominal value of the Company shares has been requested by any third party and whether it is a condition of the potential underwriting of the share capital increase.


3. Further information in relation to the circumstances causing the accounts restatement

L1 Retail believes that shareholders have not been provided with adequate details of the issues that caused the 2017 accounts restatements and any measures taken to ensure these do not reoccur. Therefore:

  • L1 Retail has requested details of any internal or external investigations that have taken place, and, if applicable, the conclusions and recommendations of the investigations;  
  • L1 Retail has also asked for an explanation of the motive and causes which have led to the proposal included in Items 4.1 and 4.2 of the Agenda, pursuant to which during 2019 there could be two accounting firms acting as auditors at the same time. 

L1 Retail also notes the Company has published a presentation, which is misleading and attempts to cast doubts on the viability of the L1 Retail recapitalisation plan.  L1 Retail intends to respond to this in detail by 8.00am on 5 March 2019.


Stephan DuCharme, L1 Retail’s Managing Partner, commented:

“We believe that shareholders deserve to know all the relevant information around the resolutions proposed by the DIA Board ahead of the AGM on 20 March 2019, in particular as they relate to the certainty and viability of what the Board is proposing.  We ask that the company update all shareholders on the important questions we have raised.  Shareholders have a decision to make and should be fully informed before they do.

“L1 Retail cannot support the DIA Board’s proposed capital raise and we will be voting against Resolutions 6.1, 6.2 and 5.2 at the forthcoming AGM. We urge shareholders to choose the certainty that L1 Retail offers.”



For further information, please contact:


Spanish media:

Aida Prados

+34 636 424 483



Juan Frances

+34 679 962 382



Shareholder Engagement and Corporate Governance advisers:


+44 (0) 203 475 5158 (UK) / +34 9112 38259 (Spain)



International media:

Stuart Bruseth


+44 203 815 3385



Billy Clegg / Jennifer Renwick / Nick Hennis



+44 203 757 4983 / +44 203 757 4994


Further details available at: www.makediaachampion.com