SPAIN: New executive hired as La Seda makes loss
La Seda de Barcelona has named Carlos Gila executive vice president to lead a restructuring of the struggling chemicals and textiles firm, which yesterday posted nearly EUR100m (US$142.6m) in first-half losses.
Gila will lead the firm's turnaround which may include the sale of up five factories acquired during the company's aggressive expansion into the PET plastic market.
During the January-June period, the company delivered a EUR98m loss compared to a EUR11m profit in the same 2008 period. Revenues were nearly halved to EUR521m from EUR928m last time.
In a statement, it cited poor international and domestic markets for its textiles and chemical products for the deepening losses.
Gila's newly created role was made to strengthen the company's management at a time when it's under pressure to refinance EUR868m of debt.
Gila, a former La Seda board member who has held executive duties for some months, is known to have great experience in corporate turnarounds.
The company's new chairman Jose Luis Morlanes, plans to lay off workers and sell factories to pay down the liabilities. Meanwhile, the company's credit rating has worsened with suppliers demanding greater payment assurances.
Underscoring the firm's troubles, the Catalan government is also said to have blocked a EUR15m credit for the firm.
Gila, who is said to have significant experience in corporate turnarounds, will undertake the restructuring plan after La Seda lost EUR588m in 2008 amid one of Spain's worse recessions in history.
By Ivan Castano-Freeman.
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