MILAN -- Simint SpA said Monday that it lost $3.1 million (5 billion lire) on the sale of its U.S. subsidiary Simint USA, substantially less than the $32 million (52 billion lire) originally expected.
As a result, Simint said it will be able to pay back suspended credits owed to its shareholders and postpone an expected capital increase.As reported, Simint has sold the money-losing subsidiary, which operates the A/X Armani Exchange business, to Singapore businessman Ong Beng Seng. Ong is a Simint shareholder and distributor of Armani products in the U.K. and the Far East.
A Simint spokeswoman said the revised loss -- the hit the parent company will take on its balance sheet as a result of the transaction -- wasn't due to a change in the sale price, which was $12.3 million (20 billion lire), as reported. Rather, she explained, the improvement was due to the speed with which the sale was concluded, thus allowing Simint to keep expected future losses off its balance sheet.
Furthermore, Simint said, it will be able to return $34.5 million (56 billion lire) in credits to core shareholders Giorgio Armani and Milan investment bank Sige. Both Armani and Sige had agreed to defer the credits in order to help recapitalize the troubled company.
Of the suspended credits, Armani is due $31.4 million (51 billion lire); the rest is owed to Sige.
As reported, accumulated losses at parent company Simint in the first 10 months ended Feb. 28 totaled $113.3 million (184 billion lire), while losses at the U.S. unit were $24.6 million (40 billion lire).
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