Swedbank allows Estonian owners to rescue Sportland29.01.2010, 13:14
18 months of tense negotiations between the two Estonian owners of chain of sports stores Sportland and Swedbank have ended with a positive outcome for the owners - they won a five-year extension for their Swedbank loans and even borrowed some more.
Today's Äripäev writes that Are Altraja and Anti Kalle who are both 39 and own the Sportland chain that has sales in excess of a billion kroons had reason to be satisfied. They say that in parallel with negotiating with the bank they downsized the company's store network. Since the beginning of 2009 Sportland cut 645 jobs and closed 56 stores with a total of 17,000 square metres. This is about a third of the company's stores and a third of its workforce.
Altraja and Kalle admit that Sportland was expanding too agressively since the company continued to make a loss even when sales exceeded a billion kroons. They refused to say how much debt Sportland has at present, but books show that at the end of 2007 the company had oevr a billion kroons in liabilities, of which bank loans and bonds were 400 million kroons. Both promised that the 2008 annual accounts will be available this week.
Justin Jenk who advises Swedbank's Baltic unit for problem loans (BFR&R) said in comment that Anti and Are are like A-Team. "They have done everything possible to prove that the company is now protected and strong. Five years is a long time and during this period they can do anything they want with Sportland, even conquer the world," said Jenk yesterday.
Jenk said that in advising Swedbank he has got the impression that the bank is ready to give companies which can be rescued as much time as they need to solve their problems. He added that the main requirement was the customer's determination to solve problem.
During the restructuring, Altraja and Kalle consolidated their most successful company Jalajälg into the Sportland Group and sold its holding in My Fitness chain of fitness clubs to Askembla.
The company's revenue forecast for 2009 is 930 million kroons. It has 986 employees and 106 stores with 49,474 square metres of sales space.