The new owners at the Delta factories

By Giorgos Lampiris

New developments are recorded in the market, which are related to the real estate perspective of businesses active in the food sector, as according to information from Capital.gr, the former facilities of the Delta dairy industry in Tavros Attica become the property of The Mart Cash & Carry .

Delta had signed a relevant agreement with the company of interests of Leonidas Theoklitou and the Sklavenitis family as early as last July, collecting an advance payment of 500,000 euros in the first phase for the acquisition of Delta’s old facilities. In fact, the relevant agreement is expected to be completed during this year.

According to the same information, several scenarios related to the utilization of these facilities are on the table, among which the darkstore operation for the distribution of The Mart’s products related to the e-commerce sector, without excluding the relocation of the company’s offices as well in the specific area. We will also remind you that in addition to cold rooms and storage facilities, the specific property also housed Delta’s headquarters in the past, which gives the management of The Mart the option to move in this direction as well.

Delta was housed in these facilities from 1965 until the beginning of 2020, when the dairy industry moved the milk production line from Tavros to Agios Stefanos, effectively merging the two facilities into one.

The factory in Plati, Imathia, to a foreign investor

At the same time, Delta proceeded with the sale of its factory in Plati Imathia, where in the past the production of evaporated milk “Vlachas” took place. According to the same information, the new owner is a foreign investor, with whom a relevant agreement has already been signed for the transfer of the facilities, with the dairy industry collecting an advance payment of 500,000 euros. And this sales movement is completed with the signing of the contracts within the year.

In Plati Imathia, Delta had acquired the factory and the “Vlachas” brand from Nestle Hellas in 2006, at a price of 2.8 million euros at the time. In 2018, Delta signed an agreement to lease part of the specific facilities to businessman and president of SEVE Athanasios Savvakis, who is active in the field of metal packaging through National Can Hellas. The object of this particular collaboration was the investment by SavvyCan and the modernization of the facilities for the production of tin cans for food.

We will remind you that in the context of a wider reorganization of the finances of the Delta dairy industry in recent years, there have been similar moves, such as the sale of the factory and equipment that the company maintained in Elassona to the Optima group, for the production of yellow cheeses such as caseri and the semi-hard. In any case, in 2019 when it was implemented, the equipment and the production of the feta, as well as the “Vigla” brand associated with the specific factory, which also remained in Delta’s ownership, were excluded from the specific agreement.

CVC Capital Partners’ plan currently sees the consolidation and subsequent development of stressed entities, such as Delta, and the further development of those that already show promising prospects, such as Barba Stathis, Golden Dough and Hellenic Dough.

In the case of Delta, these moves with the shutdown and sale of factories are not the only ones in recent years in the direction of operational restructuring. Delta in any case does not cease to gather a significant part of CVC’s interest towards the next day.

The perspective of the Athens Stock Exchange

Recently, high-ranking executives of CVC reported to Capital.gr that the plan of the fund probably includes the introduction of companies in the food sector to the Athens Stock Exchange, with priority in the frozen sector (Barba Stathis, Golden Dough, Hellenic Dough). The same sources, however, placed the possibility of importing Delta as a possibility that could materialize in the next three years.

The restructuring of lending

However, at the end of 2021, Delta was burdened on a consolidated basis with total borrowings of 146.2 million euros, of which 124.98 million euros corresponded to long-term loans and the remaining 21.2 million euros to short-term borrowings. Also, Delta and Vivartia went ahead last year in cooperation with the Banks to restructure Bank Lending. In July 2021, the new Joint Bond Loan of €131.6 million was signed, which was fully covered by the banks. The disbursement was completed in December 2021 and the new loan was used to refinance DELTA’s existing bond loan and partially repay VIVARTIA’s existing bond loan by 50%.

Cost saving moves

However, typical of the strategic direction of the company is the relevant reference of Delta in its recently published balance sheet for 2021, where it noted that the group: “in addition to the program of cost savings and achieving synergies through the reorganization of the activities it continues to implement (actions the results of which are reflected in the operating profitability and cash flow statement), considers a series of additional actions that include, among others: divestment of assets that are not part of the core operating activity, efficient exploitation and movement of funds between the group’s subsidiaries, revision of existing agreements with partners”.