ATHENS (Reuters) - Greek jewellery maker Folli Follie will seek creditor approval for a planned overhaul of the business, it said on Tuesday after announcing the resignation of the troubled company’s CEO.
The restructuring plan and resignation of George Koutsolioutsos comes after a hedge fund report in May sent Folli’s shares into a tailspin, prompted a legal investigation, a fine from the Greek securities watchdog and the resignation of the company’s founders.
Folli has admitted big discrepancies in its 2017 financial statements after an initial audit, has appointed new board members and started talks with creditors on how it will be restructured to avoid a collapse.
On Tuesday Folli announced details of its restructuring after lengthy discussions with advisers for a group of unsecured creditors who represent about 27 percent of almost 250 million euros of bonds due next year, as well as holders of 51 million euros of bonds governed by German law and due in 2021.
Folli said that it will be split in two, transferring specific assets and liabilities to one of the entities to assure investors that the “legacy accounting and control issues” will be ringfenced.
The group also delivered a new business plan it said would restore profit growth in the next three years.
Folli said it aims to raise between 25 million euros and 45 million euros from new investors in the first quarter of next year, adding that this and selected assets sales will cover its financing needs of up to 80 million euros next year.
Court approval of the restructuring plan depends on the company obtaining agreement from 60 percent of its creditors, which Folli said it is seeking by the end of the month.
In a separate statement, Folli said that its board accepted the resignation of CEO Koutsolioutsos and asked him to remain a non-executive board member to help the new management.
Follie will announce a successor in due course, it said.
Reporting by Lefteris Papadimas and Angeliki Koutantou; Editing by David Goodman