Only two of the 11 companies with tens of millions of euros in turnover, which the crisis pushed into insolvency in 2009, have managed to pass the first milestone – the approval of the reorganisation plan by the creditors. But how close are Flanco and Leonardo to coming out of insolvency?
A company can go from reorganisation to coming out of insolvency
in three or four years’ time, but retailers betting on the survival
of their business want to speed up the process in order to regain
suppliers’ confidence, say insolvency experts.
The Flanco home appliances store chain, put up for sale by creditor
banks, could make insolvency history as the fastest recovery of a
business worth tens of millions of euros. The company has recently
announced that its reorganisation plan, which provides for exiting
insolvency in a maximum of six months, has been voted for by the
creditors. Until full recovery of the business, which in fact
amounts to coming out of insolvency, the company needs to repay all
its debts, as committed to under the reorganisation plan, and keep
from accumulating new debt, say insolvency experts.
“In Flanco’s case, it all depends on whether the reorganisation
plan is observed or not and on how viable it is. It is also
important for the company to have sufficient working capital,” says
Arin Stănescu, president of the National Romanian Association of
Insolvency Practitioners.
The plan of the home appliances retailer provides for a 4
million-euro capital injection, after a new investor strong on
liquidity joins the shareholder structure, with the transaction to
be finalised in a few weeks’ time.