Creditors to give go-ahead for Price Club deal

The majority of the 200 creditors who will meet today are expected to give the go-ahead for the Price Club – Novacom deal. The Malta Financial and Business Times can confirm that the majority of the 200 creditors have overwhelmingly supported the deal. Approximately 195 creditors have given the thumbs-up to the Italian bid. Creditor were told that there was no other choice but to give-the go-ahead as the Price Club owes some Lm8.5 million to it’s 200 creditors.

Mr Giorgio Petricich, Director of the Italian Company Novacom will be in Malta today for more talks with the Price Club Directors about buying a majority stake in the supermarket chain. In fact Mr Petricich is also expected to meet the creditors and lawyers for the investment to kick-off.

The Italian company is to buy around 86 per cent of the company which has Price Club Supermarkets, at Burmarrad, Swatar, Naxxar, Birkirkara, Paola, Marsa and Attard should re-open for the public in November.

The Italian company has long been expressing an interest in the troubled Price Club chain after the Libyan company, Lafico, failed to conclude its buy-out deal.

The Italian businessman had offered Lm1.5 million to rent the stores and also stock them. Mr Giorgio Petricich, who is the former owner of the Italian supermarket giant TAM, is also ready to table a Lm4.5million sum to kick-start the company, which is due to, re-open next month.

Since the beginning of Price Club's fiscal turmoil, consultants of both the company and its creditors have indicated that what the chain needed was an injection of fresh capital. However, as the capital required could not be found from Maltese investors, the company began exploring various options that were presented from foreign companies.

The chain, in its heyday, had boasted one of Malta's highest turnovers - some Lm22 million per annum.

The chain's demise has been blamed on bad financing, management, and sway in retailing policy, which created anomalies in the supply chain.

On top of this, the information technology supporting the business when the new management took over three years ago was non-existent and investment had to be made in this area as well. Hence, the financial strain of these investments had a negative result on normal trading.