Safilo agrees plan, new key shareholder...............

[Chris Ryser]

UPDATE 1-Debt-laden Safilo agrees plan, new key shareholder
Tue Oct 20, 2009 6:49am EDT


* Hal to inject equity, to become main shareholder
* Safilo unveils weaker Q3 preliminary results vs yr ago
* Shares up 14 percent
(Adds more details from statement, analyst comment, shares)


By Marie-Louise Gumuchian

MILAN, Oct 20 (Reuters) - Italian eyewear maker Safilo (SFLG.MI) said Dutch shareholder Hal Investments would end up owning up to half the company under a 283 million euros ($424 million) recapitalisation plan.
The world's second-biggest maker of eyewear, which also unveiled falling third-quarter results, said the funds inflow would boost its capital structure and partly repay about 185 million euros in debt. Total debt is about 590 million euros.

After the statement on Monday, shares in the maker of Gucci and Dior sunglasses failed to set an opening price on Tuesday because they rose higher than 20 percent. But by 1047 GMT they were trading 14 percent higher at 71 euro cents.

Hal Investments, which holds 2 percent of the company, will have a stake of 37.23-49.99 percent, Safilo said.

Hal is the European investment subsidiary of Hal Holding NV, an investment company based in the Netherlands. Its investments include optical retail chain operators such as Pearle Europe and GrandVision.

Chairman Vittorio Tabacchi's family will reduce its 40 percent stake to 10 percent, a source close to the matter said.

Safilo, hit by falling sales in the downturn, said in July that talks with private equity funds collapsed.

The plan foresees Hal purchasing outstanding high-yield notes of 195 million euros as well as the restructuring of Safilo's senior debt facilities with its main financing banks.

The tender offer is conditional on Hal reaching an acceptance threshold equal to or higher than 60 percent.

Hal will buy Safilo stock for 13 million euros. This will be followed by a 250 million euro capital increase guaranteed by Hal, Banca IMI of Intesa Sanpaolo SpA (ISP.MI) and UniCredit SpA (CRDI.MI). Safilo will also sell non-core and loss-making retail chains in Spain, Australia and China to Hal for about 20 million euros. This would allow Safilo to concentrate on production and its licences while Hal would focus on distribution.....................

continue at: http://www.reuters.com/article/compa...0?symbol=LUX.N

[Johns]

Safilo, hit by falling sales in the downturn, said in July that talks with private equity funds collapsed.

The plan foresees Hal purchasing outstanding high-yield notes of 195 million euros as well as the restructuring of Safilo's senior debt facilities with its main financing banks.

Yeah, that ought to boost sales!:hammer:

[drk]

"I'll take 'Dutch band-aids' for $300, Alex."