Benelux Retailer FNG Gets Protection From Creditors

Lux Retailer gets protection from creditors.
FNG, which recently ousted its founding directors and replaced its CEO, now has three months to reach a refinancing deal.

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A Belgian commercial court on Wednesday, July 8, granted three months of protection from its creditors to subsidiaries of fashion retailer FNG NV, giving the group the breathing space to finalize a restructuring deal with its banks and bondholders.

The decision was announced on the same day that the country’s financial regulator said it was handing over to the judicial authorities its investigation into possible market manipulation and dissemination of market moving information by the company’s former management.

A spokesman for the regulator said the timing was coincidental and the two actions were not related.

Mechelen, Belgium-based FNG noted that the decision to grant it creditor protection followed the replacement of its board, announced over the weekend.

The company said on July 4 that it had decided to end the mandates of three executive directors, Anja Maes, Emmanuel Bracke and Yves Pollé, and bring in as their replacements FNG Netherlands managing director Richard Turk, group CFO Nathasja Van Bael and former banker Paul Lembrechts. Lembrechts, who until recently served as CEO of Brussels-region TV company VRT, also replaced Bracke as CEO.

Bracke himself had only taken over the role at the beginning of May from Dieter Penninckx, according to data from BoardEx, a relationship-mapping sister company of The Deal.

Between them, Penninckx, Maes and Bracke, the company’s co-founders control 43.96% of the company’s shares and voting rights.

FNG said Wednesday, that the opening of the so-called reorganization by collective agreement procedure for its subsidiaries Brantano NV, FNG International NV and Market Retail Belgium BV, signaled a new positive step in the rescue of the FNG group, “following the installation of a new board” and the agreement that had already been reached with most of its bondholders.

It said the Mechelen court had not agreed to appoint a legal monitor at Brantano, as demanded by one of its landlords Retail Estates NV, but had chosen instead to require regular transparent reporting by the company during the period of protection.

Brussels and Amsterdam-listed FNG had net debt of €258.5 million ($288.4 billion) at the end of June 2019. That is the most recent date for which figures are available, after FNG postponed its 2019 annual report under temporarily relaxed reporting rules brought in by European governments due to coronavirus crisis related uncertainty.

Bondholders in June agreed to proposed maturity extensions on three sets of securities totaling €20.1 million and due June 2021, but a meeting to extend the maturity of a further €45 million of debt due in July 2023 had not been quorate. A new meeting has been scheduled for July 16.

The company now has until Oct. 5 to work out and formally agree detailed debt restructuring and refinancing plan that will meet the demands of its creditors and other stakeholders. However, that deadline can be extended for a further three months.

The company, whose brands also include shoe retailer Miss Etam as well as fashion labels Claudia Sträter, fred + ginger, Expresso and CKS has said a refinancing plan is vital to the implementation of its business plan. The plan included the restructuring of its store footprint in Belgium, the stabilization of its operations in the Netherlands and expansion and continued growth in the Nordic countries. The plan also demands continued growth of digital sales throughout the Benelux region. It said its central shared services platform, covering order fulfillment, IT, human resources and finance, can also provide outsourced services to third parties.

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