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).
“I see things on the hanger and I’m, like, ‘I never knew that color worked on me.’ It’s things you necessarily wouldn’t choose to wear, but once you put them on, you see why Janie is who Janie is." — Lily Collins on working with former "Mad Men" costume designer, Janie Bryant on creating looks for her role as Celia Brady's in Amazon series, "The Last Tycoon." 📸@jilliansollazzo #wwdeye
EXCLUSIVE: Sarah Rutson has been tapped to Build New American Fashion Group. The parent of Joie, Equipment and Current/Elliott hired the merchant to rev up its brands and expand its portfolio into designer, beauty and lifestyle categories. Read more on WWD.com, link in bio. #wwdfashion
Michael Kors' $1.3B Jimmy Choo deal has the company squaring off with Coach Inc. as both seek to build American powerhouses. Coach bought Stuart Weitzman in 2015 and Kate Spade just two weeks ago, but Michael Kors' acquisition may be putting pressure on its rival in the new push for scale. #wwdnews (📷: George Chinsee)
Meet actress Lucy Boynton, who plays opposite Naomi Watts in the recently released Netflix series "Gypsy." Boynton stopped by WWD to talk about her upcoming projects and her nomadic lifestyle. Get all the details on WWD.com. #wwdeye (📷: @dandoperalski)