MILAN — History is repeating itself for Fin.part.

The heavily indebted multibrand group that owns Cerruti is once again at odds with KPMG. The auditing firm has declined to certify the company’s accounts, this time for the first six months of 2003. In April, KPMG issued the same verdict on Fin.part’s 2002 books, spurring a crisis that precipitated the resignation of Gianluigi Facchini as chairman.

“The group sustained large losses in the first half of 2003 and in the last two fiscal years and has a high amount of debt that has brought with it a situation of financial tension,” KPMG said in its review of Fin.part accounts, characterizing the company’s relations with suppliers as “critical.” It also questioned whether Fin.part will come up with the needed funds to recapitalize.

Founded in 1996 by Facchini, Fin.part embarked on a feverish buying craze and racked up enough debt to rival the size of its yearly revenues. The acquisitions binge culminated when it snapped up Cerruti through two transactions in 2000 and 2001. Fin.part paid a total of $137 million for Cerruti, a company that posted consolidated sales of $66 million in 1999.

Cerruti — along with a host of acquisitions such as home linen house Frette, sportswear brands Henry Cottons, Moncler and Marina Yachting and footwear firm Andrea Pfister — rounded out Fin.part’s portfolio but also brought on substantial debt. In an effort to repair the damage, Fin.part has sold some small assets such as the Moncler and Maska brands, as well as the Boggi retail chain. The company said late Thursday that it sold Andrea Pfister for $1.98 million, or 1.7 million euros converted at current exchange, to Mondostile Srl, a privately held company linked to the shoe designer. Fin.part also said it’s negotiating the sale of textile printing company Star.

Fin.part said Thursday its net financial debt stood at $414.7 million, or 356.4 million euros, as of the end of September, down from $621.7 million, or 534.2 million euros, a year earlier.

KPMG, reiterating comments made in April when reviewing Fin.part’s 2002 numbers, questioned whether the company can realistically carry out its strategic plan and stay in business. The primary component of this plan calls for a capital increase of $81.5 million, or 70 million euros.Facchini, still Fin.part’s biggest shareholder with a 19.5 percent stake, claims that the company has the financial resources to come up with that sum and even overshoot the target “significantly.” KPMG said it believes otherwise.

KPMG wrote that there currently “is not adequate documentary evidence” to demonstrate that the capital increase, “the principal means of financial intervention supporting the company’s strategic plan,” can be effectively carried out.

Fin.part once again defended its financial stability. The company said Thursday that Facchini pumped another $15.5 million, or 13.3 million euros, into operations. It also said that the banks have guaranteed another $23.3 million, or 20 million euros, in credit lines. Fin.part has a large bill due next year, when it must repay $232.8 million, or 200 million euros, in bonds.

Fin.part’s financial woes triggered a management shake-up at the company. In May, Fin.part named Ubaldo Livolsi as chairman to replace Facchini, who retained his role as co-chief executive alongside Silvano Storer. Livolsi, who owns his own merchant bank, amassed most of his professional experience at Dow Chemical Co. and several firms owned by Italian Prime Minister Silvio Berlusconi and his family.

In the meantime, there is speculation that Storer, a Marzotto veteran, could be leaving Fin.part. He joined the company early last year. An Italian weekly reported recently that Storer could be linking up with LVMH Moët Hennessy Louis Vuitton fund L Capital to launch a management buyout of sportswear division Pepper Industries, which controls the Marina Yachting, Henry Cotton’s and Pepper labels. Local press reports have named several Italian private equity funds as other potential suitors for the brands.

A Fin.part spokesman declined to comment on any speculation regarding Storer. L Capital did not return phone calls seeking comment.

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