Folli reaches preliminary restructuring deal with some creditors

Folli Follie SA

27/11/2019 12:08

ATHENS, Nov 27 (Reuters) - Greek jeweller Folli Follie
 HDFr.AT  has reached a preliminary deal with some of its
creditors over a rescue plan for the company, it said late on
Tuesday.
    Folli has struggled to pay suppliers and workers and keep
its business going since a hedge fund report in May last year
questioned its accounting. Its shares have since been suspended,
and the company has been fined by Greece's securities watchdog.
    The firm published delayed audited financial statements for
2017 in July that showed it had overstated annual revenue by
more than 1 billion euros ($1.1 billion). It also presented an
alternative scheme to bondholders after a previous proposal
collapsed.
    Folli has outstanding debt of about 430 million euros 
($473.95 million) due this year and in 2021, and needs the
consent of at least 60% of creditors on the rescue plan before
it can file it with Greek courts.
    The company has been in talks with bondholders for months
and late on Tuesday said it has agreed "in principle" on the
terms of its financial restructuring with a group of unsecured
creditors.
    Folli has also been in "regular discussions" with creditors
holding about 34% of 130 million euros in Swiss notes due in
2021, it said, who together with the group of unsecured
creditors represented about 41.2% of its overall debt.
    Founders Dimitris Koutsolioutsos and his wife, Ekaterini,
resigned as chairman and vice chairperson, respectively.
Koutsolioutsos owns a 35% stake in Folli, while China's Fosun
 0656.HK  holds 16.4%, according to Refinitiv Eikon data.
    The restructuring plan includes shutting down loss-making
stores and transferring core business assets to a new company
that will be wholly owned by Folli. 
    Non-core and real estate assets with an estimated market
value of about 90 million euros will pass to creditors.
    Folli has said the plan will be much more beneficial to
creditors than an orderly wind-down or bankruptcy, where it
could take five to seven years for creditors to recover their
capital. 

($1 = 0.9073 euros)

 (Reporting by Angeliki Koutantou; Editing by Jan Harvey)
 ((angeliki.koutantou@thomsonreuters.com; +30 210 3376436;
Reuters Messaging: angeliki.koutantou.reuters.com@reuters.net))