Fashion Group FNG, which owns retail brands Brantano and Miss Etam amongst others, is protected against its creditors for three months. This was decided by court after examining the retailer’s reorganisation application for a week.
Extension is possible
FNG’s reorganization request has a positive outcome: the fashion group receives the 90 days’ protection against creditors it has applied for. The protection applies to three companies, the Mechelen Commercial Court decided today. Specifically, as requested, the subsidiaries Brantano, FNG International and Market Retail Belgium are concerned.
This gives the fashion holding company and its new management time to continue negotiations with the banks and bondholders, but also to further develop the reorganisation plan. That plan must be ready by 4 September, as creditors will have to vote on the plan on 29 September.
Press judge Frank Vennekens states in newspaper De Standaard that there is room to extend the period of debt protection even further, after 3 October: “It is not customary to immediately take the maximum period of 6 months as a starting point.”
No supervisor, but weekly reporting
The court did not accede to the request of retail landlord Retail Estates to appoint a court mandatary as supervisor for the Brantano shoe chain. From now on, however, Brantano will have to send a financial report to two delegated judges every week, writes De Tijd. Retail Estates is the owner of some thirty Brantano store locations.
The next important dates for FNG are now 15 and 16 July. On that first date, the court will rule on the trade unions’ request to appoint a panel of experts to assist the management. The request was made because of a breach of trust with the former management board, but even after their replacement, the trade unions stuck to their request. The following day, FNG sits with another group of bondholders worth 45 million euros. They then will have to vote on a postponement of the redemption of the bond loans.
In a reaction, the company called the approval of the reorganisation request ‘another positive step in the rescue of the FNG group’. “The FNG group hopes that this step will contribute to a global solution and in particular the necessary financing, in the interest of all stakeholders. This applies in particular to the many employees who, despite this difficult period, continue to contribute in a very constructive and efficient way to the sales results and the recovery of the group.”
