IT&C retailer Flamingo has filed for insolvency after running up EUR 17.5 million of debt to ING Bank. The bank had notified Flamingo that it would start seizing the retailer’s stock from its stores to recover some of the debt. However, the Bucharest Court approved the insolvency request forwarded by the company, which entered into legal restructuring last week, and the Transilvania Insolvency House was appointed judicial administrator. As a result, the forced execution started by ING has been stopped.
According to Adrian Olteanu, president of Flamingo International, this is “a new stage for the company as pressure from creditors is lower, so we can concentrate on making the activity more efficient.” He added: “The company is running its activities normally, all the stores are operational and ready for the peak season.”
Flamingo will try to reorganize its business and protect itself from creditors. The retailer hopes that the EUR 7 million it should raise from the bonds issuance started on December 3 will help it pay off some of the debt and keep the company running. The amount would have been enough should the retailer have reached an agreement with ING Bank.
“Flamingo is at this point a company that is being restructured from the operational point of view, with an optimized cost structure, but which lacks the necessary cash to get through a 50 percent fall in the market. Through the launch of the process of legal reorganization, we are trying to give the efforts made since 2008 a chance and bring the company to where it should be,” company officials told the Stock Exchange.