Alfacam Ponders Bankruptcy

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Belgian outside-broadcast specialist Alfacam says it will be forced to file for bankruptcy if its financing banks fail to support the business. The company’s shares continue to be suspended. Alfacam had been seeking a financial rescue from India’s Hinduja Group.

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Alfacam’s bankers on April 2 said they would not extend further credit to the company, Europe’s largest OB outfit.   An April 11 statement said:  “The Board noted that no agreement has been found about a solution between all the parties involved in this negotiation. These parties were the candidate investors, the banks, Gigarant and the mezzanine-investors.”

The statement continued: “It was decided to investigate the possibility to move on to CEA III. Under the CEA III-regime officers from the Court of Commerce will try to transfer part of or all of the activities of the Alfacam Group to candidate investors. For the legal entities of the Alfacam group, and Alfacam Group NV in particular the CEA III-scenario could mean that they very likely will end up in a state of discontinuity over time.”

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“It will be checked with the banks in particular whether they will be able and willing to support this new scenario based on the submitted short term cash planning. If the banks are supportive of this initiative a formal request for CEA III will be submitted next week. It will then be up to the Court of Commerce in Antwerp to make a verdict about this proposal.”

“If the banks would not support the application for CEA III, or if the formal request supported by the banks would be rejected by the Court of Commerce, the company will be forced to file for bankruptcy.”

Alfacam struggled to make enough money from its broadcast vans to cover its debts, and earlier this month its lenders cancelled its credit lines.

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It signed a memorandum of understanding in December with its banks and Indian family-owned conglomerate Hinduja Group. It has also been talking with Hinduja and other potential investors, but no deal has materialised.

Now it is making a final attempt to avoid bankruptcy under Belgian corporate law, which involves officers from Belgium's Court of Commerce trying to transfer its activities to some of its investors.

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