Coelho Diniz family increases stake in GPA to almost 25% and requests election of new board of directors

GPA announced on Sunday that shareholders from the Coelho Diniz family have requested the convening of an extraordinary general meeting to decide on the dismissal of the entire board of directors and the election of new members to the food retailer's board.

According to a material fact from the company, the shareholders explained that the intention of the request is to seek representation on the board proportional to their current shareholding, "which will be done through the timely appointment of people with technical qualifications, with reinforcement of specific skills, in line with the challenges envisioned for the company."

In a separate market statement, also on Sunday, GPA said that André Luiz Coelho Diniz, Alex Sandro Coelho Diniz, Fábio Coelho Diniz, Henrique Mulford Coelho Diniz and Helton Coelho Diniz reported that their joint holdings reached 24.6% of the total common shares issued by the company, which owns the Pão de Açúcar chain.

With this move, the Coelho Diniz family becomes GPA's largest shareholder—a position previously held by Frenchman Casino, the company's former controlling shareholder, who still holds a 22.5% stake, according to information on the Brazilian company's investor relations website. As of mid-July, the Coelho Diniz family held 17.7% of GPA's shares.

Citing the unanimous support expressed by the members of the board of directors for the convening of the EGM, GPA said it will take the necessary measures to convene the meeting within the legal deadline.

In the material fact, the retailer said that, in addition to including the family's request, the agenda of the EGM will include the election of a member and respective alternate of the company's fiscal council, following the resignations presented by André Francez Nassar and Diego Xavier Mendes, as already announced.

According to a source familiar with the transaction, GPA management understands that this is a natural move, considering that the Coelho Diniz family has increased its stake, is a majority shareholder, and should see this representation on the board.

The same source stated that GPA management has a positive view of the request, considering that the Coelho Diniz family was already on the board, and increased the percentage probably seeing how the current management is managing to continue with the "turnaround" plan.

The company's executive team understands that they are retailers and can contribute to GPA with their vision and experience.

"Management remains focused on delivering results and continuing to make progress -- both structural and sequential," the source said, adding that GPA's management remains focused on delivering the current strategic plan and committed to reducing leverage.