WWD.com/beauty-industry-news/financial/bertelli-talks-of-ipo-in-2005-742934/
government-trade
government-trade

Bertelli Talks of IPO in 2005

PARIS — The long-awaited initial public offering of Prada could come in 2005, chief executive officer Patrizio Bertelli said at a conference here.<br><br>Bertelli said Prada plans to revisit its IPO plans before $700 million of the...

PARIS — The long-awaited initial public offering of Prada could come in 2005, chief executive officer Patrizio Bertelli said at a conference here.

Bertelli said Prada plans to revisit its IPO plans before $700 million of the company’s bonds reach maturity. Those bonds are convertible into Prada shares if and when the firm goes public. If there’s no IPO by mid-2005, Prada has to reimburse the bondholders.

(Dollars are converted from euros at the current rate.)

“By that time, we will sit down with our banks and look at the market conditions and see if it makes sense,” he said on the sidelines of the International Herald Tribune’s fashion conference.

“I believe the IPO is very important,” Bertelli said. “It’s basically a question of timing. We just need the right window of opportunity and we will definitely float the company.”

In June, Prada postponed its IPO for the third time, citing poor market conditions. The cancellation was a last-minute move and came just days before its roadshow was scheduled to begin.

Late last year, Deutsche Bank issued $700 million worth of bonds convertible into Prada shares when the firm goes public.

But if Prada fails to go public by mid-2005, those bonds can be redeemed for cash plus a premium of 0.25 percent a year.

Bertelli also said Prada doesn’t plan to issue more bonds between now and 2005.

Prada has amassed considerable debt over the past few years from a series of acquisitions, including Helmut Lang, Jil Sander and Church’s. As of June 30, Prada’s net debt stood at $807 million.

The multibrand group is mulling several options to cut debt and clean up its balance sheet. It has said it might opt to spin off some or all of its real estate assets, including its network of stores, factories and offices, which are estimated to be worth more than $500 million.