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Greece: textile companies look to chinese shores for funding

Greece: textile companies look to chinese shores for funding Source: english.ctei.gov.cn
Date: 07-03-2012
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A number of Greek businesses are exploring alternative avenues of funding by approaching potential investors as far afield as the United States and China. For companies with an outward-looking approach and a strong brand name, the inflow of capital from a foreign investment fund is just the thing to offset the negative international image of the domestic market.

Wool producer Fintexport SA is one such company and it is already in talks with the management of the Chinese group Fuxing Group over a possible deal for the Greek company to produce thread, while the Chinese group also appears interested in investing in thread and carpeting production. Fuxing does similar work to Fintexport, but it is three times bigger in size. Fintexport is aiming at a return to a profit within the next two years if it can secure funding worth 2 million euros. In April 2011 Fintexport secured a loan of 9.3 million euros in order to refinance its debts and increase liquidity. The listed company had reduced its long-term loans to 3 million euros in the third quarter of 2011 from 10.74 million at the end of 2010.

The management of Hellenic Fabrics SA is aiming at a strategy of development and has been in talks since last summer with a potential investor represented in Greece by Lead Finance. According to sources the investor’s interest is focused on participating in increasing the share capital of the listed company, while the same sources also say that the investment capital manager already has a presence in Greece.

Hellenic Fabrics has significant know-how in the production of denim, making it a leader in the European market. With exports accounting for 95 percent of its turnover, it is in a good position to find a strategic partner abroad. Italy and Turkey are the listed company’s biggest markets and it is believed that the participation of any foreign investors will contribute to boosting its profile abroad but also to reducing its debt burden. In the third quarter of 2011, Hellenic Fabrics owed 88.52 million euros, down from 95.7 million at the end of 2010.

Opening up new markets continues to be the strategy focus of Selected Textiles SA, which over the past few years has been making investments in the energy market, from which it expects revenues as high as 6 million euros this quarter.

The company is also expected within the month to make its final bid for a stake in Hellenic Sugar Industry, from which it expects to see benefits from the agricultural sector and from energy. The group has already been issued with permits to produce electricity from biogas and biomass through its subsidiary Selected Biogas Farsala SA.

It is expected to begin construction of its production unit this year, while it is also likely to be making an announcement soon concerning its involvement in photovoltaic energy as well.

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