Prada Gets Loan Extension
Luxury brand Prada won't have to scramble for cash anytime soon. Earlier this summer the Italian fashion house sought to renegotiate some of its debt in order to have ready cash to create more stores. The lenders have agreed and now the brand has the money to invest in expansion. The terms of payment of 450 million euros of debt have been extended to 2012. Of that debt 100 millions euros would have been due last month and the rest would have matured in summer 2010. With the extension Prada's majority owners, Miuccia Prada, the label's designer and her husband and Prada chief exec Patrizio Bertelli don't have to contemplate selling off shares.
Prada has flirted with holding an initial public offering several times in the past couple of years but always backed out citing poor timing. This new loan agreement could possibly push Prada to make that move before the loan comes due in 2012. With the emerging signs that the recession might be starting to wane, Prada is also well-poised to take part in any potential shopping upswing.