Pepe Jeans refinances debt and expands capital, targeting growth

By

Eva Gracia Morales

Published
Jul 19, 2019

Pepe Jeans has managed to refinance its debt. The Spanish fashion group has signed an agreement to refinance its syndicated loan and ensure its new long-term financing plan. Shareholders approved a capital increase.

The Pepe Jeans group, as announced on Friday in a press release, has signed a refinancing agreement for its syndicated loan with 14 financial entities, in an operation co-led by BBVA, Banco Santander and CaixaBank.

The shareholders of the company also approved a capital increase "to reinforce the solvency of the group and the financial capacity required to execute the growth plans of its different brands," the brand explained.

The operation "will give the group flexibility and allow it to focus on its business plan, initiated in this fiscal year, to consolidate the growth of its brands in its main markets, implement its digitisation plan and adapt to the changes that consumer expectations and the retail industry have both undergone.”

According to Carlos Ortega, the founder, shareholder and CEO of the group, "this agreement reflects the commitment and support of the financial institutions and the shareholders of the group."

With the announcement of the agreement, Pepe Jeans is taking a definitive step in its long-term refinancing process. Earlier this year, the group hired investment bank Rothschild and consulting firm McKinsey to reduce their expenses and refinance their debt, and also arranged for L Capital, LVMH's venture capital fund, to inject money into the company to facilitate its refinancing.

The group’s operational headquarters is in Barcelona, ​​although its main market is in the United Kingdom. The Spanish company has been owned by Lebanese investment group M1 (owned by billionaire Najib Mikati) since 2015, when its sale closed for €720 million. The fashion group became loss-making in 2017, recording a loss of €13.11 million.