Erosky negotiates bonds and loans to refinance 750 million

Buy it He again knocks on the doors of banks and funds to support the capital structure, four years after their great bailout ball match Financial. The Basque supermarket chain has begun negotiations to restructure 750 million debts. Their plans include issuing bonds worth between 400 and 500 million and signing loans worth 250 million involving Spanish banks that sold the group’s debts and national and regional public institutions, according to financial sources.

Eroski signed a determination process for its future in 2019. It succeeded in refinancing its obligations amounting to 1.500 million and protecting its historical cooperative structure to save the complex financial situation that had been prolonging since the crisis, when it accumulated 4,000 million required. In turn, the creditors demanded that they be divested of some businesses, such as Caprabo, DHe sold 50% to Czech businessman Daniel Krytinsky. It also sold its travel agencies to W2M, a subsidiary of Iberostar. It achieved other minor sales, from its own supermarkets and from 27 supermarkets.

This transaction freed Eroski to meet any maturity of its obligations through 2024. Organize religion into two tranches. One from 1,000 million, with an Euribor coupon plus 2.5%. And another 540 million in a bullet-type loan that ends in 2027, with a maximum interest of 0.5%.

In these years, Eroski has shown its creditors that it has more than delivered on its promise in 2019. According to its latest annual accounts, it paid back 43 million in 2021, allowing banks to forgive another 250 million.. The group’s liabilities currently amount to 750 million, of which 500 million are due next year and 200 million in 2027.

With just a year before much of that responsibility expired, on July 31 of the next year, Eroski got down to business. He commissioned Evercore to obtain new funding. The bank has designed a structure that allows it to break out of the yoke of the money that got debt from the banks, and fit into the operational optimization of the business and the new reality of the group. The main creditors are Hayfin, DK and CrossOcean.

The Bank designed a new debt structure that is divided into two tranches. The first part ranges between 400 and 500 million with the issuance of a bond. The company is currently working with rating agencies to obtain a rating for the company, which would clearly be below investment grade. For now, it has already given a mandate to BNP Paribas and Deutsche Bank as global coordinators for this issue, while Spanish banks are shaping up to act in a second move. The idea is to launch the offering after the summer to achieve a price of just 8%.

The rest of the amount, up to 250 million, will correspond to the credits. To do this, the company is investigating the return of Spanish banks to the company, after they fled and sold their debts to the funds a few years ago. It also hopes that Basque Business Support Organizations and ICOs will play a relevant role in this section. And to encourage national banks to participate.

Eroski is trying to find a capital structure, and therefore, more conducive to optimizing its business, with Eroski expected to reach €300 million at the end of this fiscal year. The aim is to reduce cost, but mainly to free themselves from the conditions of divestment and premature depreciation that have forced them to take on funds. Erosky says he is exploring various alternatives to refinance his debt.

In 2021, the company entered the positive trajectory and returned to profit after the losses of the previous year and recorded its best result in 14 years. It achieved 105 million in that year, with an income of 5116 million and 260 million. In 2022 the results are somewhat worse. Revenues amounted to 5,500 million euros, but profits fell 40 percent to 64 million due to high inflation.

That year, in addition, the company changed leadership. Rosa Carabell has assumed the position of CEOTo replace President Agustín Marquide, who had been in charge of the supermarket chain for 11 years.

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