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Banker Says Covarrubias Near Closing Deal for GFT

FLORENCE -- A group of Mexican entrepreneurs led by industrial magnate Fabio Covarrubias is close to concluding its bid for troubled Italian designer label manufacturer GFT SpA, according to an investment banker representing Covarrubias.<BR><BR>Dante...

FLORENCE — A group of Mexican entrepreneurs led by industrial magnate Fabio Covarrubias is close to concluding its bid for troubled Italian designer label manufacturer GFT SpA, according to an investment banker representing Covarrubias.

Dante Razzano, managing director of the Morgan Grenfell bank’s Milan office, flatly denied an Italian press report Thursday that the Covarrubias bid had been withdrawn due to political and economic problems in Mexico.

“It is absolutely not true that our deal has had any difficulty because of the political situation in Mexico,” Razzano said, noting that negotiations with GFT’s Italian creditor banks and merchant bank Mediobanca are “at an advanced stage.” As reported, Mediobanca is masterminding GFT’s financial restructuring. The apparel maker has a debt of about $350 million, owed to 13 banks.

“Covarrubias has brought forward an offer that we believe is very close to meeting the banks’ requirements,” Razzano said, but declined to give details of the proposal.

GFT’s managing director Clemente Signoroni confirmed that the Covarrubias bid is still on the negotiating table, though he wouldn’t provide any specifics about the deal.

He did say that improvements in GFT’s financial and productive outlook have recently attracted other potential buyers besides the Mexican group.

“In the past three months, the restructuring of the group’s corporate and operative situation has been such as to regenerate interest in the company,” Signoroni said.

He noted that GFT has signed a new contract with Giorgio Armani that runs until 1995, as well as one with Valentino that runs until 1996-97.

Signoroni declined to name the other interested buyers, but confirmed that an extraordinary GFT shareholders’ meeting has been set for Jan. 25 to approve a $59 million (100 billion lire at current exchange rates) capital increase operation, required under Italian law to avert bankruptcy.