Belgian ‘fallen’ fashion group FNG had its alarm bells go off recently: the shareholders of the fashion group had to convene because the group’s net assets had fallen to less than half of the capital.
Alarm bell procedure
FNG found that its net assets had dropped to less than half of the entire capital when calculating the annual figures. In other words, the group now has more than twice as many debts as assets. These numbers do not come as a surprise, given that both Covid-19 and disaster struck last year. The holding company – then owner of CKS, Brantano and Miss Etam, among others – went bankrupt in the summer of 2020, and the founders were prosecuted on suspicion of fraud.
Yet, the law requires a so-called alarm bell procedure if the net assets fall so sharply. Therefore, the directors were forced to organise an emergency general meeting and present a recovery plan. The shareholders approved the recovery plan almost unanimously (99.99 %), which is no surprise since the proposal was the same as the restart plan that the shareholders had already approved back in June.
New meeting in the autumn
The relaunch plans are already largely in execution, FNG stresses in a press release. The most important element remains the settlement with Nordic Capital, the former owner of e-commerce platform Ellos. In that settlement, FNG promised to pay the Scandinavians one hundred million euros, but since that money is not yet available, the group does not have to pay until later. In exchange, FNG will keep only “part” of its participation in Ellos Group after a strategic capital review.
There will be another general meeting in the autumn, at which FNG will announce the final annual figures for 2020 and present an annual report. Shareholders will then have to vote again. Or, as Executive Chairman Paul Lembrechts said earlier: “Our ambition remains to move fast, but we continue to put accuracy, transparency and correctness before speed.”
