Lenders to the investment vehicle behind luxury brand Prada have agreed new loan terms which will grant the brand time to invest in expansion and possibly set a deadline for its floatation.
Lenders to Prada chief executive Patrizio Bertelli and his wife Miuccia Prada’s investment vehicle, have agreed to postpone the term of payment of €450m (£382.7m) of the group’s debt until 2012, according to WWD.
The extension was agreed last week following months of negotiation and removes any pressure on the couple to sell a stake in Prada to generate funds. Sources added that it also possibly sets a deadline for Prada’s eventual floatation on the Milan Bourse, which is now likely before 2012.
Prior to the new agreement, €100m (£85m) of the sum was due to be repaid in July, while €350m (£297.6m)matured in July 2010.
Bertelli and Miuccia Prada control 95% of Prada via Prada Holding. Amsterdam-based Prada Holding has debts of €650m (£552.6m). Prada, which operates brands including Prada, Miu Miu, Car Shoe and Church’s, reported net debts of €537.4m (£457m) at the end of its 2008 fiscal year. EBITDA for the year was €282.2m (£239.9m)
The new loan terms at Prada Holding will allow Bertelli to achieve plans to generate more than 70% of consolidated turnover from directly-operated stores by 2011, up from 53 % currently.
Private equity firms have been circling Prada since it called off plans for an initial public offering last year for the fourth time this decade.
A Prada spokesman denied a report over the weekend that Prada’s lenders had contacted Swiss luxury group Compagnie Financière Richemont about taking a 30% stake.