Filati Biagioli Modesto #02

Presentation of the company

Created in 1992, Filati Biagioli Modesto S.p.A. is active in the textile sector. The company, managed by Franca Biagioli, has 78 employees and is based in Montale.

The company’s main activities are:

• Manufacture of high quality carded natural yarns;
• Research and development activities aiming to highlight all the features of pure cashmere as well as other noble fibres.

The company works with textile distributors and well known fashion companies.

The company has also an internal dyeworks which operates as a separate entity called Tintoria Biagioli Modesto S.r.l. but primarly works for Filati Biagioli Modesto S.p.A.

Project Description

The company requests a loan of 150 000 € over 36 months to finance the implementation of a detox project that will allow the company to eliminate all releases of hazardous chemicals and introduce a new responsible business model. The project will be implemented by the sister company Tintoria Biagioli Modesto S.r.l. This project will be realised this semester.

As a reminder, the October lending community supported Filati Biagioli Modesto S.p.A. in June 2018 with 500 000 € to finance the renovation of the production plant. All installments have been paid regularly and remaining capital outstanding is 450 000 €

This project is not covered by the Italian state guarantee.

The amount offered on the platform is limited to 73 500€, which is in line with the regulatory limits.

Like all projects presented to private lenders on October, it is co-financed with institutional investors, sophisticated investors and the management of October, subscribers to the October Fund.

Analyst’s Opinion

As closing date changed, turnover of 2015 represents 18 month of activity.

With a turnover of 33 047 300 € in 2017 and an experienced team, the company has a good track record combined with a strong operating margin.

The forecast is based on the provisional performance of 2018.

The borrower has a correct repayment capacity with a forecast FCCR (Fixed Charge Cover Ratio *) at 1,12 and a good financial structure, with a forecast net debt / ebitda ratio of 4,86 and a net debt / shareholder equity of 111%.

The analysis of the project leads to a credit rating of B and a 5,5% annual interest rate.

*The multiple of FCCR at 1,12 means that the company has a safety margin of 12% relative to its ability to repay its credit maturities.

The expert opinion is given as an indication on the basis of the elements provided by the project holder and information from our databases (ModeFinance, Crif, Cerved). This opinion is only an element of reflection in the decision making of a lender to participate in the financing of a project.

Strong Points:

• Good historical performance based on diversified client base;
• Correct repayment ability with a forecasted FCCR of 1,12 reinforced by the support of banking pool;
• High quality of "Made in Italy" products.

Points of Caution:

• High leverage due to high level of inventory.