Florin Panea, owner of Leonardo, a retailer under insolvency fortwo months, is considering, among others, attracting an investmentfund in its shareholder structure in a bid to raise cash to pay itsalmost 100m-euro debts.
Leonardo, the biggest footwear retailer, with 136m-euro turnoverlast year, this autumn filed for insolvency pressured by creditors,as well as a result of the 25% decline in sales this year.
"There are several funds we've been in contact with so far, buttalks are at an early stage as we haven't finalised ourreorganisation strategy. Should Leonardo's business generate thenecessary capital to cover debts, we will not need a capitalinflow. There is also a worst case scenario, where ourreorganisation plan will not work and this very much depends on thetrend of the market, and then we will need the help of aninvestment fund," stated Radu Lotrean, managing partner of Casa deInsolventa Transilvania (Transylvania Insolvency House), in chargewith the reorganisation of Leonardo network.
Lotrean does not provide any details on the stake that couldcome to be owned by the investment fund.
This is the first statement on Leonardo's possible move toattract an investor in its business, because Florin Panea is one ofthe Romanian entrepreneurs who did not like such an option when themarket experienced a sales boom, preferring financing through bankloans.
Lately, the businessman has not said much about the company'sreorganisation strategy, with answers to ZF's requests for commentbeing provided by Radu Lotrean, who spends a lot of time at Panea'sside within the company.
Lotrean says that should Leonardo decide to take in aninvestment fund, the deal could take place as late as the end ofthe first quarter of 2010.
Leonardo is now working to finish the lenders' table that shouldbe submitted by March 1, 2010. Within 30 days after that date, theretailer will submit its reorganisation plan and if approved bylenders, the company will start paying out previous debts.
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