MONACO (Reuters) - Italian fashion house Prada is talking to banks about renegotiating its debt, Executive Vice President Carlo Mazzi said on Tuesday.
The Financial Times reported on Monday that the fashion group, whose designer Miuccia Prada is regarded as a trailblazer for fashion worldwide, was in talks about a slice of its debt as it seeks to free up cash for its aggressive store expansion.
“It is true. It’s the normal activity of the company, the normal rescheduling of finance,” Mazzi told Reuters on the sidelines of the Financial Times Luxury Summit in Monaco.
“It has nothing to do with current trading. Of course, if the market was better, we would do our IPO and would get finance from the market instead of banks.”
Mazzi did not give further details.
Citing people familiar with the group, the FT said talks were underway between the company and its creditors, led by Italian banks UniCredit and Intesa Sanpaolo, to reschedule the repayment of 350 million euros ($483.9 million) that matures in the summer of 2010.
Prada’s total debt of about 1.1 billion euros is divided between that owed by its industrial operations -- 537.4 million euros at end-2008 -- and that owed by the holding company, and the amount under discussion is owed by the latter, it said.
The banks are understood to be willing to consider rescheduling repayment to 2011 or 2012, the paper added.
Prada is almost exclusively owned by Miuccia Prada, her partner and CEO Patrizio Bertelli and family members.
The fashion house, which has had its sights on a public offering in the past, turned in a net profit of 99 million euros in 2008 -- down 22 percent from a year earlier -- as it invested around 160 million euros in its retail network.
Last week a spokesman said the fashion house had turned down an approach by investors interested in buying a minority stake.
Reporting by Astrid Wendlandt; Editing by Rupert Winchester