MILAN, Feb 13 (Reuters) - The board of Italy's debt-laden Mariella Burani Fashion Group (MBFG) has decided to ask for protection from creditors and for the company to be put in administration, it said in a statement on Saturday.
It said it believed this was the right move for creditors and workers as it does not plan to close its business.
MBFG, whose shares have been suspended since September, has nearly 500 million euros ($683.6 million) in debt and has been in talks with banks for months to seal a restructuring deal.
Its banks had said they did not want to agree on a debt deal until the Burani family showed it had 50 million euros available for a capital increase to cover losses. A self-imposed deadline ran out on Friday.
'The MBFG board, after having noted that the company has not received evidence of a binding commitment from partners or third parties ... to cover losses (of nearly 71 million euros) ... has deliberated ... to go ahead and ask bankruptcy protection,' it said.
The move comes after a Milan court on Thursday declared bankrupt the family's Burani Designer Holding (BDH), which indirectly controls MBFG.
On Friday, at MBFG headquarters in northern Italy's Cavriago, workers downed tool for eight hours and marched through the streets to draw attention to the company's plight, a union worker said.
Founded in 1960, Mariella Burani is among several luxury goods groups to fall into financial trouble as the global crisis squeezes demand for luxury clothes and accessories. ($1=.7314 Euro) Keywords: MARIELLABURANI/ (Milan newsroom +39 02 6612 9507, fax +39 02 801 149, milan.newsroom@reuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
It said it believed this was the right move for creditors and workers as it does not plan to close its business.
MBFG, whose shares have been suspended since September, has nearly 500 million euros ($683.6 million) in debt and has been in talks with banks for months to seal a restructuring deal.
Its banks had said they did not want to agree on a debt deal until the Burani family showed it had 50 million euros available for a capital increase to cover losses. A self-imposed deadline ran out on Friday.
'The MBFG board, after having noted that the company has not received evidence of a binding commitment from partners or third parties ... to cover losses (of nearly 71 million euros) ... has deliberated ... to go ahead and ask bankruptcy protection,' it said.
The move comes after a Milan court on Thursday declared bankrupt the family's Burani Designer Holding (BDH), which indirectly controls MBFG.
On Friday, at MBFG headquarters in northern Italy's Cavriago, workers downed tool for eight hours and marched through the streets to draw attention to the company's plight, a union worker said.
Founded in 1960, Mariella Burani is among several luxury goods groups to fall into financial trouble as the global crisis squeezes demand for luxury clothes and accessories. ($1=.7314 Euro) Keywords: MARIELLABURANI/ (Milan newsroom +39 02 6612 9507, fax +39 02 801 149, milan.newsroom@reuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.