OrotonGroup is on the verge of deciding to either sell, privatise, recapitalise or refinance its troubled handbag and fashion accessories company.
The company entered a trading halt on Monday ahead of its finalising a six-month strategic review of its business, brought on by plunging sales and earnings.
It would remain in a halt until it announced the outcome of the review or when the ASX opens on Thursday, it said.
Oroton’s share price has fallen from about $7.80 in early 2013, to $2.44 a year ago, to its closing price on Monday of 43??, its lowest value since 1999.
Oroton said in June that several parties had expressed interest in buying the group, refinancing its debt facilities or a recapitalisation.
The company’s stock is tightly held, with the founding Lane family holding 21 per cent of shares. Ross Lane, whose grandfather Boyd Lane started the company in 1938, was brought in to replace Mark Newman as CEO in April after its half-year profits fell 52 per cent.
The Lane family taking the company private is one possible outcome.
Gazal Corporation, the listed wholesaler of Calvin Klein, Tommy Hilfiger, Van Heusen and Pierre Cardin apparel in , is also a potential player after buying 7.3 per cent of Oroton in July.
Fund manager and long-time company backer Will Vicars, of Sydney-based firm Caledonia, owns 18.2 per cent of shares. Mr Vicars offered up to $3 million in credit support to Oroton in June as it underwent the strategic review, led by investment bank Moelis & Co.
At the time, the company said the review focused on “maximising value for the company and its stakeholders”.
In August Oroton said it would shut the doors on its six Gap franchise stores, exiting the American fashion chain so it could focus on its core handbag business and limit future financial losses.
Oroton fell to a $14.2 million loss in 2017, including the cost of the strategic review and ending the Gap franchise agreement, down from a $3.4 million profit in 2016.
On an underlying basis, it ran at a $3.3 million loss compared with a $4.6 million profit in 2016.