Italian company GF Group has revealed it plans to sell a number of as yet unspecified subsidiaries and focus on its core business as it bids to turn around a sharp decline in annual profit at its main fresh produce division Fruttital.
The group said its financial and commercial restructuring was “progressing swiftly”, despite auditor Deloitte & Touche’s recent refusal to sign off annual accounts filed by its fresh produce import subsidiary Fruttital.
In a statement, it revealed that shareholders had approved €16m in new funding and that its five creditor banks had given the green light to a proposed new financing deal. Subject to legal approval, a binding agreement is set to be signed by the end of October.
The repackaging of a reported €115m in loans currently extended to GF Group will apparently see those banks take up equity in the company and, according to Italiafruit News, leave former majority owner Antonio Orsero with a 25 per cent shareholding.
“This represents a fundamental step in formalising the debt restructuring agreement with the banks,” it said. “This will allow the group to hit the road towards a definitive relaunch following the difficulties of the last few years.”
Worrying trend
Recent figures quoted in the Italian press suggested Fruttital’s sales were down again in 2013 compared with the previous year, from €260.49m to €244.1m, with a reported €8.81m loss for the year, down from €3.76m in 2012.
Fruttital’s dire performance over the past couple of years, combined with a notable tightening in the availability of financial credit, has prompted the restructuring, which saw the business transfer its entire logistics and distribution operation from Albenga in Liguria to a location just outside Verona in January 2014, laying off 60 workers in the process.
“Completing the agreement with the banks should allow us to formalise various current negotiations relating to the divestment of subsidiary companies that are not part of the group’s core business,” the statement continued. “The resulting liquidity should contribute significantly towards the re-establishment of financial stability.”
Once the new arrangements have been implemented, likely before the end of the year, a brand new board of directors will be appointed including independent experts and a new managing director to lead the company’s planned recovery.
“This relaunch will focus primarily on the importing and distribution of fruit products and the development of the Fratelli Orsero brand.”
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