MILAN — IT Holding SpA will hold a board meeting today to discuss expressions of interest from “various parties” as it continues to seek a solution to its beleaguered financial situation.
The Italian fashion group stated Monday that it was still in talks with Chinese businessman Billy Ngok’s Mensun Ltd., but no longer on an exclusive basis, and that “contacts with other investors” had started. (Mensun’s exclusive terms expired Dec. 31.)
One of the proposals involves a capital increase and renegotiation of IT Holding’s debt, which “could allow the group to rebalance its financial situation,” according to the statement.
IT Holding also said a delay in royalty payments had created “tension” with licensors and that discussions were under way, “aimed at finding a solution in the common interest of all parties.” (IT Holding’s main license for Just Cavalli, which contributed more than a third of group revenues in 2007, expires next year and is under scrutiny, following Roberto Cavalli’s negotiations with private equity firm Clessidra SGR SpA, according to sources. Cavalli is in talks to sell between 15 and 20 percent of his company to Clessidra.) Long-standing rumors resurfaced last month linking Renzo Rosso’s production unit, Staff International SpA, with the Just Cavalli license. A spokeswoman for Rosso declined to comment Monday.
IT Holding, which owns the Gianfranco Ferré, Malo and Extè brands, and also operates under license the VJC Versace, Versace Sport, C’N’C Costume National and Galliano labels, is being squeezed by net debts, which, as of Sept. 30, totaled 295.4 million euros, or $378.5 million. Dollar figures were converted at average exchange rates for the periods to which they refer.
IT Holding met with financial institutions last week and asked for effective and full use of the credit facilities formally available at least in the short term.
In December, credit ratings agencies Moody’s Investors Service and Standard & Poor’s downgraded IT Holding for the second time in as many months, after the fashion company asked lender Intesa Sanpaolo SpA to postpone for a second time a 9.4 million euro, or $12 million, payment on a loan originally due in October to April.
Also in December, IT Holding said it had reached a nonbinding agreement with Mensun regarding “a possible disposal of assets.” At the time, IT Holding did not specify what those assets were, but they are thought to include Ittierre SpA, its apparel manufacturing unit. In September, IT Holding said negotiations involved the sale of a minority stake in PA Investments SA, its parent company, and possible commercial and production agreements in the Asian market.
IT Holding chairman Tonino Perna controls 60.6 percent of IT Holding via PA Investments and a further 1 percent via GTP Holding SpA, a separate holding for PA. PA has debts of around 140 million euros, or $179.4 million.
In November, IT Holding forecast an 8 percent drop in full-year revenues and a lower profit margin, after a net loss of 10.1 million euros, or $15.4 million, in the first nine months of the year.
IT Holding’s share price slumped 9.2 percent to a new low of 0.16 euros, or 21 cents, at the close of trading in Milan.
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