Folli Follie Reorganized Negotiations With Creditors, Promising A Few Days Of Trading To Determine The Restructuring Plan.

According to the world clothing shoes and hats net, Greece

Jewelry and accessories retailer Folli Follie Commercial Manufacturing and Technical SA (FFGRP.AT) Fu Li (FF Group), a management manager, claims that the company, which is deeply involved in financial fraud, is reorganizing negotiations with three creditors. It is expected that a deal will be made within a few days to confirm the restructuring plan for Liv.

The suspension of FF Group for eight months is still trading at 4.80 euros in May 24, 2018, with a market capitalization of only 318 million 400 thousand euros, and the company is facing an expiry of 430 million euros. Although the group is trying to sell part of its real estate business, it is still difficult to make up for its debt. If the company wants to avoid bankruptcy, it needs further financing to supplement its operating costs.

In addition, because of the huge scandal of financial fraud, insiders from the company say that most FF Group suppliers hope that Greek companies can make payment in advance, or suppliers refuse to deliver.

On the Western Valentine's day in February 14th, FF Group announced that it had approved an updated provision for financial restructuring with the debentures. On that basis, Greek companies would extend invitations to all creditors to reach a restructuring agreement in accordance with the proportion of creditors prescribed by law.

Greek company insiders told Reuters on Friday that, in addition to closing to a restructuring agreement, the company is also negotiating with Asset Management Co Kyma Capital, Oasis and Mercier Vanderlinden on business reform and financing. 27% of the 249 million 500 thousand euro debt expired by FF Group this year belongs to the three companies mentioned above.

If FF Group Group appeals to recover more than 100 million euros of assets frozen, the three creditors may provide 41 million euros of financing to Greek companies, and creditors will take 67 million euros from total assets and eventually acquire 80% shares of the Greek group, according to sources.

However, the restructuring plan requires at least 2/3 of shareholders and creditors to approve.

In May 2018, after being kicked off the financial fraud by Quintessential Capital Management LLC (QCM) in the US hedge fund, the Greek company refused to admit it. Eventually, the regulators intervened in the investigation and ordered the external audit institutions to audit the FF Group 2017 financial statements, especially the most doubtful Asian businesses.

At the end of September, the audit report was released, and the fraud situation of FF Group was very striking. The core businesses in Asia were all exaggerated, including the Asia Pacific Group.

Revenue was exaggerated ten times, and in 2017, the audit revenue was $116 million 800 thousand, while the company reported $1 billion 112 million 300 thousand in the earnings report, and the stock fraud was the index, and the $33 million 874 thousand inventory was exaggerated to $581 million 700 thousand.

The fraud of profit and cash flow is even more insane. By the 2017 fiscal year preliminary audit report of Alvarez & Marsal and EY Ernst & young, it was pointed out that as at the end of 2017 fiscal year, FF Group Asia's cash balance was only 6 million 400 thousand dollars, and recorded a loss of 44 million 700 thousand dollars, while the original earnings claim that the cash balance and profit reached 296 million 800 thousand US dollars and 316 million 400 thousand US dollars respectively.

In the restructuring plan submitted in December 19th, the Greek company said that the real income in 2017 was only 357 million euros, while the April annual report showed that the income was 1 billion 419 million 300 thousand euros. In 2017, EBITDA was also updated from 294 million 900 thousand euros in the April annual report to -3800 million euros.

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The fashion and department store business is the largest source of revenue for FF Group. In fiscal year 2017, its 181 million euro income accounted for 50.7% of the group's total, while the contribution of Folli Follie Follie brand was less than 1/4.

Fashion and department stores are also the only profitable businesses. Folli Follie recorded EBITDA -3400 million euros.

Management has also described the development plan for the next three years. It intends to restore profitability by focusing on fashion and department stores, Folli Follie brand, Links of London, brand and cosmetics, from the optimization of store network, procurement channel, logistics office and strengthening the brand mix direction in three years in three years.

Dimitris Koutsolioutsos, which holds the 35% share of the group, is still the largest shareholder, and in 2011, the 0656.HK of FF Group was the second largest shareholder.

Fosun International's interim results at the end of August 2018 showed that investment in Greek companies turned from a 62 million euro yield to a loss due to a false accounting scandal.

In the paction of FF Group, the total investment of Fosun international was 86 million euros, during which it received a total dividend of 7 million euros, while the FF Group's share price plummeted and the fair value of investment dropped 101 million euros.

What surprised the Fuxing international investors is that after the scandal of financial fraud, Fosun international increased its holdings to Greek companies.

FF Group co-founder Dimitris Koutsolioutsos and Ekaterini Koutsolioutsos, and their son George Koutsolioutsos have resigned from the board as vice chairmen and chief executives.

Meanwhile, three of them and seven others, including chief financial officer, accounting controller, Asian president and director, were formally charged with fraud and money laundering by Greek financial prosecutors at the end of last year. Assets were also frozen.

The Greek company's current business is headed by its deputy chief executive, Narkissos Georgiadis, and its chief financial officer, George Samios, who took office in January 9th.

According to sources, it is estimated that FF Group will be able to complete its audit report in fiscal year 2017 at the end of March, and then the approved restructuring plan will be approved by the court's audit room. It is expected to be submitted to the court in early April, but the court approval may take several months.

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