The Belgian fashion group FNG promises to pay Nordic Capital 100 million euros. The Scandinavian fund still had too much money since it sold the Swedish web store Ellos to FNG in 2019. FNG largely went bankrupt last summer.
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Nordic Capital sold at the end of 2019 the Swedish web store Ellos to FNG. The Belgian fashion group – and thus well-known chains such as Brantano and CKS – went bankrupt last summer. But the listed company FNG nv continued to exist and continued with its only activity: Ellos. The profitable online store, which converted EUR 316 million in turnover last year, may be worth a lot of money.
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That gave FNG creditors hope. If Ellos is sold, they hope to recoup some of their losses. Similarly Nordic Capital. The fund started arbitration proceedings against FNG.
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The settlement states that there will be a ‘capital review’ from Ellos and that afterwards 100 million euros will flow to Nordic Capital.
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The fund is now stopping it, because it has the prospect of a repayment. The settlement states that there will be a ‘capital review’ from Ellos and that afterwards 100 million euros will flow to Nordic Capital. “Payment is contingent on the completion of the strategic capital review,” said a press release.
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What the deal between Nordic Capital and FNG means for the banks BNP Paribas Fortis, ING, Belfius and ABN AMRO is not clear. They threaten 260 million euros to lose in the bankruptcy of FNG. Part of the loan is guaranteed with Flemish tax money by Gigarant (PMV), an investment vehicle of the Flemish Government. FNG was not available on Monday for further explanation.
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Agony
The settlement comes about a year after the suffering of FNG and its 3,000 employees began. In early May 2020, CEO and founder Dieter Penninckx announced unexpectedly that he left the company. Officially due to illness, but it soon became clear that there was more to it.
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The company’s accounting turned out to be inaccurate. FNG couldn’t help but one impairment of 200 million euros. The company also had to make a provision of 94 million euros. That money was still too good on paper from suppliers, but there were no contracts for those deals. So there was a good chance that FNG would never see the money.
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At the same time it became clear that the company had 734 million euros in debt. In addition, it had a negative EBITDA (gross operating income).
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Block accounts
In the spring of last year, FNG urgently had to look for 70 million euros. To pay off debts, finance a restructuring of Brantano and Fred & Ginger and buy an autumn collection.
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The company hastily searched for a buyer, but to no avail. On that FNG went bankrupt.
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Suspended for a year
Only one part remained: the listed company FNG nv. Her only daughter is the profitable Swedish web store Ellos, who FNG in its latest major acquisition end of 2019. In May it will be one year since the FNG nv share was suspended from the Brussels stock exchange by the stock market watchdog FSMA.
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The founders of FNG are suspected of fraud. Dieter Penninckx ended up in prison for a while.
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As the company went under, it turned out that the three founders of FNG may have butter on their heads. Dieter Penninckx, Anja Maes and Manu Bracke have been tried by the investigating judge charged with fraud. Penninckx even ended up in prison for several weeks because he did not meet the conditions of the investigating judge. His wife Anja Maes had to walk around with an ankle bracelet for several weeks.
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