ATHENS – Once one of Greece’s most successful domestic and international jewelry houses, the falling Folli Follie is awaiting claims from banks and bondholders after the company resorted to a pre-bankruptcy protection procedure.
The company wants to prevent the seizing of its assets and other actions that could force it to shut down, said Kathimerini, but gained a measure of security the group’s subsidiary in Luxembourg, which issued two bonds for Folli Follie – of 50.4 million euros ($58.83 million) and 102.4 million euros ($119.53 million) – accounting for 28.69 percent of the company’s total obligations.
Banks and creditors are expected to argue that is invalid because the Luxembourg-based firm is a subsidiary of Folli Follie and the creditors were not consulted before the bonds were issued.
In June, with is finances being probed by Greek authorities and suspended from the Athens Stock Exchange (ASE, Folli Follie said it needed time to finish its own audit and promised to fix any “operational failures” and stay alive.
The Greek-owned company, with a presence in 25 countries, is also being sued by the Hellenic Market Commission for failing to provide financial data as demanded, which could result in felony charges if an indictment is brought.
The company’s shares lost 70 percent of their value after irregularities were noted and it was suspended by ASE amid reports inaccurate data had been supplied over its real financial standing which the company denied, although it also backed the suspension.
Local media reported the company was dragging its feet on signing a contract with the audit firm that would investigate its finances at the regulator’s request.
Folli Follie said in a bourse filing the news was “inaccurate” and that it needed time to prepare “such a demanding and complex task,” the Reuters news agency reported.
“We will do everything in our power to provide all required information and we are ready to remedy any operational failures, if any,” the filing said.
A new internal audit committee, a prerequisite for signing the contract with Ernst & Young for the audit, was set up, it added.
Folli is 35 percent owned by the Koutsolioutsos family and had sales of 1.4 billion euros ($1.65 billion) last year, with Asian operations accounting for more than two-thirds of turnover, but where it’s facing fierce competition.