Stockmann to retain Lindex under restructuring plan
That speculation came after the company had said just over a year ago that it was looking at “strategic alternatives” for the ownership of Lindex, which it saw as having “great potential”.
But on Monday, as it announced the proposals that have resulted from its restructuring review, it said “Lindex’s operations will continue under the ownership of the Stockmann Group, and its cash flows contribute to cover payment obligations disclosed in the restructuring programme”.
Looking at the wider plan, Stockmann said that both “the company and the administrator are confident that the measures described can be used to restore the company’s business and the prerequisites for a profitable continuation of business exist”.
It includes the continuation of Stockmann’s department store operations, the sale and lease-back of department store properties located in Helsinki, Tallinn and Riga to pay down debt, plus that Lindex news.
The firm’s department stores are in Finland and the Baltics and the duration of the new programme is eight years. During this time, we should see a “sharpened strategy [that] responds to the changes in the operating environment and consumer behaviour by investing in customer relationships and loyalty, enhancing the customer experience in all channels, fostering a customer-centric culture, and focusing on profitable business operations”.
It’s also been negotiating new lease deals for certain properties that see it occupying smaller space than previously at the Jumbo shopping centre in Vantaa, Turku department store, Tampere department store, and Tapiola department store. Talks on the department store lease agreement at ITIS shopping centre in Helsinki are continuing.
The company also said it’s not planning on any “material reductions in personnel" as part of the restructuring programme.
And good news for some creditors is that the administrator has authorised it to pay all small-scale creditors “their entire receivable if it does not exceed €5,000. As a result of this decision, the company has paid the receivables of more than 400 creditors in November and early December 2020”. It repaid €0.7 million in small-scale liabilities by December 10.
All of its actions should cut its unsecured debts by 20% and creditors have the option to convert this 20% share of the restructuring debt into the company’s series B shares.
Stockmann also said its largest creditors are in support of its plans and its largest shareholders (representing 45.3% of shares and 62.6% of votes) are too.
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