The well-known Italian pasta maker De Cecco is looking for a new minority shareholder to support its growth, in view of a subsequent listing on the Stock Exchange, Il Corriere della Sera reports. But in the meantime the shareholders, all members of the De Cecco family, are quarreling and bondholders had a bad surprise, Italia Oggi writes.
In recent days, in fact, the vice presidents Giuseppe Aristide and Saturnino De Cecco have resigned from the board of the parent company Fratelli De Cecco (not from the subsidiaries). The resignation is said to be due to dissent in the operational management. The chairman remained Filippo Antonio De Cecco who in recent days has acquired a 8.59% stake of the company from his brother Giuseppe Adolfo, arriving thus to a 23.59% stake and becoming the single largest shareholder of the company. The three branches of the family, represented by Filippo Antonio, his grandson Saturnino (with 23.41%) and Giuseppe Aristide with his two daughters (with 12.04%), therefore now hold 59% of the group. All the other components of the family follow, from cousin Giuseppe Alfredo, who has 10.50% with their children, to Maria De Cecco (Saturnino’s sister) with 9.92%. Finally 8 other members have shares between 4 and 5%.
Last August the ceo of De Cecco, Francesco Fattori, former top manager also of Nomad Foods and Reckitt Benckinser, left his role to become ceo of the Optima MEC group, a leading group in the ice cream and pastry sectors (see here a previous article by BeBeez). Fattori had been appointed ceo of De Cecco in June 2018 and suddenly revoked by the Board of Directors in April 2019. Then in May 2019 De Cecco had signed a 10 million check for shareholders in the form of equity distribution, but forgot to communicate the move to the bondholders within 5 days as stated by the 21 million euro ExtraMot Pro–listed bond’s Admission Document.
The Document specifies that such communication must be made within those terms, in the event that the financial covenants are not complied with due to the distribution of equity too. As specified in a press release issued at the beginning of January, in fact, for the covenant Net financial position / Shareholders’ equity a ceiling of 1.5x was set for 2019: in December 2018 the ratio was 1.3x, but, after the distribution, it went up to 1.52x. The threshold is slightly exceeded, but enough to allow bondholders to request early repayment. For this reason, De Cecco apologized to the bondholders, saying that the failure to communicate was the consequence of an operative error. Those minibonds were underwritten by 15 investors, with Cassa Depositi e Prestiti as anchor investor with an investment of 12.5 millions. Other subscribers were Ersel sim, Consultinvest Asset Management sgr, Confidi Systema !, Volksbank and Banca Popolare di Bari (see here a previous article by BeBeez). At the same time when the that bond was issued in 2018, De Cecco had issued another minibond , not listed, worth 4 million euros, while in March 2017 it had issued a 12.5 million euros minbond which had been fully subscribed by the Fondo Sviluppo Export, managed by Amundi sgr (see here a previous article by BeBeez).
In all this turmoil, De Cecco is looking for a financial investor to whom sell a minority of the capital, after having been in negotiations last year with a large international fund, which however was interested in control. All this, it was said, with the aim of landing on the Stock Exchange in a medium term.
It is certainly not the first time that for De Cecco is rumored to be think of an IPO. The last time it was a little less than two years ago, when one of the issues on the agenda of the shareholders’ meeting of the pasta group said “Presentation and start of the admission process to listing” (see here a previous article by BeBeez). But even ten years earlier an imminent IPO had been mentioned, so much so that a group of banks (Mediobanca, JPMorgan and Lazard) had been given a mandate to deal with the listing on the Star segment, but then the project was put apart.
Founded in 1886, the De Cecco group does not only produce pasta, but also extra virgin olive oil, ready-made sauces, tomato derivatives and bakery (bread substitutes) and is a well-known brand in Italy and abroad, thanks to its presence in 120 markets, with an important presence in France, Germany, England, the Usa and Japan, and with halal certification which guarantees compliance with Islamic regulations for Muslim consumers. According to preliminary balance sheet data, in 2019 the company’s revenues would have risen by 6.56% to 480 million euros and margins from 50 to 54 millions.