Oaktree Capital Management Buys 4.42 Million Shares of Diamond Foods, Inc. (DMND)

In a filing with the Securities and Exchange Commision, Oaktree Capital Management, led by Howard Marks revealed initiating a stake in Diamond Foods, Inc. (NASDAQ:DMND). The fund purchased 4.42 million shares of the company at a price of $10 per share.

OAKTREE CAPITAL MANAGEMENT

Diamond Foods, Inc. (NASDAQ:DMND) is packaged food company. This week, the company completed its refinancing of debt capital structure, of an aggregate principal of $230 million, at 7.000% Senior Notes due 2019. This step was taken to reduce the cost of debt, the proceeds from the offering will be used prepay outstanding indebtedness of the existing credit facility and a part of the proceed will be used to redeem senior unsecured notes due 2020, held by Oaktree.

Diamond Foods, Inc. (NASDAQ:DMND) also closed its $125 million syndicated secured credit facility, and also commenced $415 million, 4.5 year syndicated secured credit facility.

For the first quarter of 2014, the net sales of the company fell by 9.2% to $234.7 million, compared to $258.5 million in the prior year period, while there was a slight improvement in gross margins, which increased to 24.7% in the first quarter, compared to 22.7% last year.

Of all the hedge funds we track, Sigma Capital Management, a subsidiary of Steven Cohen‘s SAC Capital, held 1.38 million shares, worth $35.63 million at the end of the fourth quarter of 2013. It is followed by Donald Chiboucis’ Columbus Circle Investors, which revealed owning 1.10 million shares, with a reported value of $28.47 million at the end of December.

Oaktree Capital Management specializes in alternative investments, inclined towards distressed debt, convertible securities and corporate debt.

Last month, Oaktree Capital Management upped its stake in EXCO Resources Inc (NYSE:XCO) and revealed owning 45.25 million shares, which equals to a 16.6% of the company’s stock. At the end of the fourth quarter, the fund sliced its position in Star Bulk Carriers Corp. (NASDAQ:SBLK) to 5.7 million shares, from 6.1 million shares held previously.

Disclosure: none

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