Greek jewellery maker Folli aiming for creditors deal 'within days' -source

Folli Follie SA

22/02/2019 10:22

By Angeliki Koutantou
    ATHENS, Feb 22 (Reuters) - Greek jewellery maker Folli
Follie  HDFr.AT  is in talks with three bondholders hoping to
firm up a restructuring plan "within days", a senior company
source told Reuters on Friday. 
    The step is key for the company, which has debt of about 430
million euros due this year and in 2021, to avoid collapse.
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    Along with its luxury jewellery trademark, Folli distributes
international apparel brands in Greece, including Nike and
Calvin Klein. It employs 5,000 people in its home market and
abroad, including in China and Japan.
    A hedge fund report in May suggesting the company
misrepresented sales sent Folli's shares into a tailspin,
prompted a legal investigation, fines from the Greek securities
watchdog and the resignation of the company's founders. 
    An initial audit into its Asian operations months later
showed massive discrepancies in its 2017 financial statements.  
    Since then, Folli has appointed new board members. 
    The source told Reuters that Folli has also been in talks
with asset managers Kyma Capital, Oasis and Mercier
Vanderlinden, which represent 27 percent of a 249.5 million euro
bond due this year, regarding its business overhaul and
financing.  
    Folli hopes the parties will agree on the final details of
the so-called term sheet "within days", the source told Reuters
on condition of anonymity. 
    The source said the three bondholders could offer 41 million
euros ($46.46 million), if the group won an appeal to recover
assets, worth more than 100 million euros, that money laundering
authorities blocked as part of a judicial investigation.
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    The bondholders in turn would receive a fee of 67 million
euros and could eventually acquire more than 80 percent of
Folli's shares, the source said.
    Founder Dimitrios Koutsolioutsos holds a 35 percent stake in
Folli. China's Fosun  0656.HK  owns 16.4 percent, data from
Refinitiv showed.
    The term sheet also needs to be approved by at least two
thirds of creditors and shareholders and Folli needs to have its
2017 financial statements audited before it submits its overhaul
plan to a Greek court. 
    The latest audit of its 2017 statements is expected to be
concluded by the end of March, the source said.
    "In theory, the plan should be ready for submission to the
court in the beginning of April," the source said.
    But approval by the court could take several months and to
cover its financing needs, Folli is exploring the divestment of
assets including a property in Hong Kong and a helicopter, to
raise 20-30 million euros, the source added. 
    Folli is meeting its obligations as an employer but with its
credibility hurt, it is struggling to secure supplies, the
source said, adding that most suppliers want payments in
advance. 
    "They refuse to pack half of a box if they are not paid
upfront," the source said.
    ($1 = 0.8825 euros)

 (Reporting Angeliki Koutantou; editing by Jason Neely)
 ((renee.maltezou@thomsonreuters.com; +30 210 3376439; Reuters
Messaging: renee.maltezou.reuters.com@reuters.net))