Italian fashion house Prada plans to launch a 700 million euro ($615.1. convertible bond issue in a bid to cut its estimated 1.3 billion euro debt after aggressive expansion, a source close to the deal told Reuters.
The issue will be led by Deutsche Bank and would have a term of up to three and a half years, the source said.
Prada, which has delayed a planned listing on the stock market twice this year, said this month it could issue a bond to continue growth.
Itmd Investment, the holding company that controls Prada, will use 400 million euros of the bond’s proceeds to pay down debt and 300 million to buy into a Prada capital increase, the source said.
The portion of Prada’s total capital the bonds would represent if they are converted into equity has yet to be determined, the source said.
Sources on Thursday said Prada was in talks to sell its 25.5 per cent stake in fashion chain Fendi to world luxury-goods leader LVMH, prompting some industry experts to say Prada’s IPO plans appeared to have been shelved.
Prada has notched up about one billion euros of debt buying labels ranging from Jil Sander line to Church’s shoes