Creditors give the go-ahead to Flanco reorganization plan

Casa de Insolventa Transilvania, judicial administrator of Flanco, announced that the re-organization plan of Flanco has been approved by all the four groups of creditors following a general meeting that took place today.

“The approval of the re-organization plan represents one of the final steps before the official exit from insolvency. Internally, we consider this process already completed and Flanco is at this moment a new and re-structured company,” says Adrian Olteanu, CEO Flanco (in picture).

The company demanded the opening of the insolvency procedure on December 10, 2009 and the reorganization plan was approved after 8 months.

Flanco reached break- even in June 2010, after 21 months in which it registered losses, between September 2008 and June 2010. The company aims to reach a market share of 10 percent and a turnover of EUR 110 million in 2011.

Before the insolvency was declared, Flamingo International, the mother company which was listed on the Stock Exchange, controlled retailers Flanco International, which ran Flanco stores, and Flamingo Computers, in charge of the Flamingo Computers shop network. The distribution was controlled by Flamingo International which centralized all the group’s acquisitions and then distributed the stock to the retailers. When the group went into insolvency, the approach changed. “Previously, everything took place within the group, but after this procedure started, we found out that in the insolvency procedure, each company is distinct and has a different legal administrator. So, today, all the employees and all the assets are registered to the Flanco entity. Flamingo no longer has any employees,” explains Adrian Olteanu, CEO of Flanco International, said previously during a press conference.

The total value of the debts was approximately EUR 60 million, at the level of the entire group. Bank creditors were owed EUR 34 million. ING was the firm’s biggest creditor, to which there were unpaid outstanding debts of EUR 17.2 million.