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Prada agrees new loan terms

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.

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