ORPHANIDES supermarkets, in the red for over €200m, are to be placed in receivership, the company has announced.
The largest supermarket chain is indebted to banks to the tune of some €140m; additionally it owes suppliers €85m and €10m to other creditors.
The decision for corporate bankruptcy was announced yesterday by Andreas Andronikou (photo below), of UK auditing firm UHY Hacker Young.
Andronikou is to be appointed receiver pending approval by the main creditors, Popular Bank and the Bank of Cyprus. The banks will reportedly back the move.
Speaking to suppliers yesterday, Andronikou was blunt: he said the aim was to find a buyer for the company as soon as possible.
The debt was so large it could not be covered even if the company returned to profitability, he said.
The company recorded a loss of €17.7m for the first three quarters of the year, and was already planning to shut down a number of stores.
Andronikou called on suppliers to rally around the company in helping find a buyer, something he said he hoped could be achieved sometime in the next six to eight weeks.
“Should the company be wound up, even the banks, which are guaranteed creditors, might not get their money back, much less you,” he told them.
The shake-up will also see founder and CEO Christos Orphanides step down.
Speaking at the same gathering yesterday, Orphanides took full responsibility for the company’s state of affairs:
“Unfortunately, mistakes have been made, and I assume responsibility,” he said.
According to Orphanides, the company ran into problems more than a year ago, but the situation rapidly deteriorated in recent weeks when a minority of large contractors stopped supplying the chain.
Supermarkets have been left without a number of basic products, he said.
The Cyprus Stock Exchange (CSE) said it was suspending for yesterday the trading of titles of Orphanides Public Company Ltd following news reports that the company was going into receivership.
The Bourse said the decision was taken “to ensure the smooth functioning of the CSE market as to the aforementioned securities and in order to protect the investors.”
The CSE decided also to transfer the shares of the company to the Special Category Market from the Main Market of the CSE, starting from today, Friday 14, 2012.
Cyprus Mail