Surprisingly, an Italian court has accepted a request to place in bankruptcy proceedings Futura 5760, a holding company that indirectly controls Lotto Sport Italia. Futura, which is controlled by Andrea Tomat, president and chief executive of Lotto, owns 27 percent of Lotto’s shares and 70 percent of Next B, which in turn holds a 47 percent stake in the Italian sporting goods company. The reason given by the court stems from the incomplete payment of a debt of about €3 million claimed by Gianni Lorenzato, a former manager of Lotto and a minority shareholder of Next B.
A lawyer for the company says the court’s verdict was an incredible act of injustice. A few weeks before declaring Futura insolvent, the same court in Treviso had allowed Futura to pay the dues in installments over 36 months. Futura had already paid 20 percent of the amount upfront as well as the first two installments. Lotto’s lawyer noted that Lorenzato’s claims are still under scrutiny by a court in Venice, and in addition, his credit is secured by pledges on shares held by Futura.
Tomat has immediately appealed the court’s decision. In a public statement, he pointed out that the current bankruptcy proceedings will have no impact on Lotto’s employees or its operations. A new court decision on Futura’s future status is expected by next Jan. 29.
Lotto’s legal experts are confident that the case will be resolved, noting that Futura has no other debts or claims, that it has had positive cash flow from the start and that it is well funded, with equity of more than €1 million and shareholders’ loans of €6.4 million.
After the court’s sentence, Tomat received several statements of support and manifestations of interest by important financial institutions and entrepreneurs in Italy and abroad. He declined to confirm media speculation that he is prepared to bring in new investors if Futura’s insolvency is confirmed.
Lorenzato is a former vice president of Lotto who had helped Tomat and Adriano Sartor, owner of 8 percent of Lotto’s shares, to bail out the company from a previous round of bankruptcy proceedings 20 years ago. Lorenzato quit Lotto in August 2015 over a conflict of opinions with Tomat about its financial reorganization, which ultimately led to its merger with Stonefly a few weeks ago.
Earlier this year, Lotto obtained a refinancing package to restructure its debt, which amounted to €65 million at the end of 2017. The banks agreed to renegotiate the debt after an equity increase of €5 million approved at an extraordinary shareholders’ meeting that led to a simplification of Lotto’s equity structure. It allowed Franco Vaccari to split his former indirect stake of 22 percent between Next B, which raised its interest in Lotto from 56 percent to 70 percent, and Futura 5760, which raised it from 22 percent to 27 percent.
Vaccari, a former owner of Nordica, was one of the investors who helped out Tomat 20 years ago by forming a joint venture with Giancarlo Zanatta, former president of Tecnica, which owned 49 percent of Lotto’s shares. The joint venture, called Vizeta, still holds an interest of 18 percent in the company, but Vaccari is no longer involved.
The newest equity structure came out of another equity increase this September that led Lotto to raise its stake in Stonefly, the casual footwear company that is also run by Tomat, from 40 percent to 100 percent. The two companies have been pooling personnel and investments in new technologies.
Last year, Lotto and Stonefly together generated an Ebitda margin of 7 percent on wholesale-equivalent sales of €359 million and net earnings of €2 million on net revenues of €114 million.
