Belgian fashion group FNG wants to delay payments of interests and debts of its bonds, causing concerns and speculations as its CEO Dieter Penninckx has suddenly left as well.
Delay for bonds
Analysts and investors are very worried about the future of FNG, as the fashion group has lost 80 % of its share value in a year's time. This Monday, news that founder Dieter Penninckx was forced to leave the company was followed by the news the group wants to delay paying its debts, pushing shares even lower. FNG wants to meet with its bond holders on 19 May, hoping to persuade them to accept a delay in repayment of its bonds and interests.
Some analysts fear that these apparent financial difficulties are not only corona-related, pointing to the controversial acquisition of the Swedish Ellos group, for which FNG went into a lot of extra debts. Estimates of the current total debts are around the 400 million euro mark. Comparisons of the debt with the group's EBITDA are made difficult as the company has also decided to delay publication of its 2019 financial results, but analysts assume debts would be four times higher than EBITDA.
These situations make FNG itself an attractive prey for an acquisition, analysts believe as speculations about an impending bankruptcy are now worsened by the sudden departure of founder and CEO Penninckx.