Octavian Radu files for Diverta's insolvency

Businessman Octavian Radu has filed for Diverta retailer insolvency with a view to its judicial reorganisation, according to the company's representatives. "Diverta's debts top 10m euros and this is why we chose to go in judicial reorganisation. The current conditions of the economy and the inflexibility of developers (i.e. the shopping centres where Diverta has stores opened) have given rise to the current cash flow problems," stated Amalia Buliga, Diverta CEO.

The court-appointed administrator will be Casa de Insolventa Transilvania (Transylvania Insolvency Firm).

Diverta's owner, Octavian Radu, explained that some stores had started to "eat" more than they yielded (gross margin), which led to debts to suppliers and developers and payment problems. "The crisis and the dwindling number of clients that bought products conflicted with spending, which could not be reduced despite our efforts," Radu said.

Diverta network, a major book distributor on the Romanian market, ended last year with 30m-euro turnover, down 37% from 2008. EBITDA was negative, reaching 600,000 euros.