MILAN — GFT SpA has developed a bridge financing plan that will enable the troubled manufacturer to meet minimum corporate capital requirements under Italian law.
A GFT shareholders’ assembly Tuesday approved a plan to wipe out the company’s losses and increase its capital up to $88.5 million (150 billion lire).
Although GFT hasn’t disclosed its 1993 losses, banking sources estimated them to be around $59 million (100 billion lire).
GFT officials declined to elaborate on the details of the financing plan, but banking sources explained that the operation is a stopgap measure that will bring GFT’s dire capital situation within the limits permitted by law until an expected agreement with a new buyer for the firm is reached.
As reported, Mexican industrial magnate Fabio Covarrubias, who last year bought GFT’s retailing and production operations in Mexico, is the front-runner to buy control of the Turin-based company, although other offers have been reportedly made by a U.S. LBO fund and Italian footwear entrepreneur Diego della Valle.
Until a new shareholder lineup is decided, GFT’s affairs are essentially in the hands of the banks, with Milan merchant bank Mediobanca masterminding the rescue plan and coordinating the group’s 13 creditor banks.
The banks are expected to underwrite the capital increase in proportion to their debt exposure. Italian banks together hold some $353 million (600 billion lire) in GFT debt, while GFT’s German operations represent an additional $59 million (100 billion lire) for total debts of $413 million (700 billion lire).