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Conforama on the brink of bankruptcy, Goal returns as a white knight


For two months, the furniture giant has requested a guaranteed loan from the state, which is still pending. According to our information, a serious track

Conforama is dangerously close to the cessation of payments. In the midst of recovery, the furniture giant - 3rd in the sector behind But and the leader Ikea - which employs 9,000 people in France and is gradually reopening its doors (around twenty stores out of 200) is being hit hard by the economic impact from Covid-19. The company's cash flow - in turmoil since 2017 due to the financial difficulties of its parent company, the South African Steinhoff and the Yellow Vest crisis - is at an all-time low.

To the point that the general manager of the company, Marc Ténart, raised the alarm signal with his employees and his suppliers on May 12 and 13, indicating that he only has "a few weeks of cash left". According to one of its suppliers, “the speech of the CEO of Conforama was very worrying for the entire wood industry. We are no longer paid by the group. The fall of Conforama would have knock-on consequences for our industry, which represents 40,000 jobs. "

The group asked the State for a guaranteed loan of € 300 million

To keep its head above water, Conforama appealed to the State to obtain a guaranteed loan (PGE) of an amount close to 300 million euros (M €). Friday evening, a meeting organized by the interministerial industrial restructuring committee (CIRI) brought together the banks and the leaders of Conforama, without reaching an agreement on this loan.

The unions of the company denounced on Saturday the inertia of the banks on this EMP, including the position of BNP Paribas which rejects the accusations. "If a new industrial and commercial project, long term and mobilizing current shareholders or new shareholders, were to take shape, BNP Paribas would examine it," she retorts. According to our information, the HSBC bank would be primarily involved in this loan, as the historic financial partner of Conforama.

Shareholder funds favor their interest

"Without a guaranteed loan, Conforama risks being delivered to a rapacious buyer who will hasten to slice our business," fears FO like the other unions which appeal to the State. But some banks do not understand the request for an EMP to finance losses that are not linked to the epidemic, but "to the previous situation of the company," says one of the bankers familiar with the matter.

In addition, the attitude of the company's shareholder investment funds seems to be causing confusion, according to our information. The investment funds had started selling the company's cutout, as we revealed last July. After having acquired the ownership of the group's foreign subsidiaries through a trust mechanism (Editor's note: ownership transfer mechanism) , the funds planned to collect a large part of the sales amounts from these subsidiaries.

"With the establishment of the EMP, the financial interest of the investment funds that own Conforama could be to appropriate the real estate of the company in France," analyzes a source familiar with the matter. "They reject all the other solutions that would be less favorable for them, but more beneficial for the company and the sector," continues the same source.

Purpose ready to buy while preserving the brand

Having been on the move for several weeks, the CIRI has been working hard to preserve employment and the industry. According to our information, one of the solutions on the table to save Conforama would consist of a merger with But - who has been studying the file for a year - in a sort of alliance. An operation that would resemble the Fnac-Darty merger of 2016. The two companies would remain independent with commercial, distribution and autonomous purchasing strategies. Each brand would continue to deploy, but with a common shareholder.

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Contacted, the CEO of But, Alexandre Falck, tells us: “If we were to study a project, the priority for us would be to preserve employment at Conforama and But, but also with our French suppliers. We are traders, our obsession would be to develop the two brands. We are ready to study all the options for protecting the furniture industry ”. According to our information, the shareholders of But (the Austrian furniture group Lutz and the investment fund CD & R) are ready to contribute 200 to 300 M € to pay the suppliers of Conforama, ensure short-term deadlines and preserve jobs.

Source: leparis

All business articles on 2020-05-17

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