An Italian court has granted The Italian Sea Group creditor protection on a temporary basis, as per its request. The same protection extends to the Group’s parent company and Celi, its interior-fabrications company.
According to a press release from The Italian Sea Group, the Court of Florence approved the measures on April 20. They are retroactive to the date of filing, March 16, for a maximum of four months.
The court ruling bars creditors from taking a variety of actions. They cannot receive priority to acquire shares in or the entirety of the Group without the parent company’s permission, for example. They also cannot initiate and/or enforce asset seizures or account freezes. This same protection extends to superyachts currently in The Italian Sea Group’s yards. (The Italian Sea Group builds yachts under the brands Admiral, Tecnomar, Perini Navi, and Picchiotti. It further owns NCA, a refit and repair company.) Forcing the Group into insolvency or bankruptcy liquidation is barred as well. Creditors additionally cannot refuse to honor existing contracts or change their terms in a way that would harm the Group. Finally, no one can revoke previously approved lines of credit if based only on The Italian Sea Group not meeting obligations preceding the protection enforcement date.
Notably, The Italian Sea Group creditor protection also involves owners with yachts in build. The court decision prevents them from canceling their contracts.
The request for creditor protection follows the company voluntarily entering a process to reorganize and restructure its creditor obligations. The Group discovered financial irregularities, publicly revealing them in March. It filed a criminal complaint shortly thereafter, claiming senior executives colluded to provide CEO Giovanni Costantino with false information regarding cash flow, order budgets, and bank statements. Budget overruns impacting most megayachts under construction were discovered in February.
Related to this, GC Holding, The Italian Sea Group’s parent company, loaned the Group €25 million (about $29 million) to stabilize finances. The auditing firm KPMG is in the midst of a forensic accounting analysis to determine responsibility for the financial irregularities and the exact amount of budget overruns. Its findings are due by early May.
Activities related to management and yacht construction reportedly remain on their regular schedules.
The Italian Sea Group theitalianseagroup.com
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