Future of Dielmar thrown in doubt
The official receivers of Portuguese clothing company Dielmar have received two offers for the company but with lots of strings attached.
And the time needed to produce and present a recovery plan “would not be sufficient to predict the viability of selling the factory in time.”
Recalling the lack of cashflow to pay October’s salaries and that the factory is currently at a standstill, without any communication with clients or suppliers, the official receiver João Maurício Gonçalves recommends “the definite shutdown of the company, with the termination of employment contracts on expiry, followed by a winding up process and sell off of the assets of the insolvent estate.”
In this scenario, the official receiver would request the creditors permission for KPMG to be hired in a contract worth €17,500 (+VAT) to press ahead with valuing the company’s assets “opening the way for setting of a fair price for organising the sale process”.
If there is a viable and concrete offer alternative to a total and immediate closure of the company, the official receiver Maurício Gonçalves will advise the creditors meeting on 6 October that all work should be suspended by the end of the month at the very limit to allow time for the prospective buyers to improve their offers currently on the table and which, as they stand, display “insufficiencies or conditioning factors which would be ultimately impossible to overcome regarding the price, the subject matter of the proposed agreements or the financial means attached.”
“The suspension could enable, through a negotiating process that has been deemed necessary, to adjust the terms of some of the expressions of interest, turning them into offers considered sufficiently consistent to complete the sale of the factory and save jobs.”
The two expressions of interest — the interested parties have not be revealed — that have been received by the official receiver concern the acquisition of the factory and the brands. However, “in both offers, the expression of interest is vague, with few details regarding the track-record of the investor in the clothing sector or even the way it intends to finance the business.”
Dielmar was one of the largest employers in Portgual’s Beira Baixa region, employing over 250 staff. It currently owes the Portuguese State €8 million, the banks around €7 million, suppliers €2.5 million and social security €1.7 million.
The minister of Economy, Pedro Siza Vieira is on record for having said about the case— “the purpose of public money is not to save private entrepreneurs” whole admitting “the State will probably not recover the money owed that was lent to the company.”