France's Baccarat in trouble as Chinese owner seeks cash
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The storied French crystal maker Baccarat has been placed in administration by a court trying to determine if its Chinese owner will be able to raise emergency funds as sales tumble, the company said Tuesday.
Hong Kong-based Fortune Fountain Capital, which bought Baccarat two years ago, was itself placed in liquidation in July as debts piled up, according to a ruling by the Nancy commercial court in eastern France, seen by AFP.
It had pledged to restore Baccarat's lustre by tapping into Asian demand for its hand-crafted sculptures, chandeliers and tableware that have graced posh tables since the reign of Louis XV.
But Fortune's uncertain fate has made bankers reticent to extend funds despite the French government's offer to back loans to companies hit by the coronavirus outbreak which has hammered luxury firms.
Last month, the 256-year-old company posted a 30 percent drop in sales during the first half of the year to 52.2 million euros ($61.4 million), citing "an unprecedented global health crisis".
On Monday, the Nancy court appointed two independent administrators in an "exceptional measure" to see how Baccarat can remain viable.
"The goal is to evaluate whether Baccarat is facing an acute crisis making normal operations impossible and exposing it to imminent collapse," the court said in its ruling.
Eric Rogue, a member of Baccarat's works council, said its factory around 60 kilometres (40 miles) southeast of Nancy was currently operating at just 80 percent capacity after months of total shutdown during the Covid-19 lockdown.
"Employees are worried. We want Baccarat to find a robust shareholder and stability," Rogue said.
The works council wrote to management in July to complain the firm resembled a "rudderless ship" without a captain, alluding to internal disputes among executives at Fortune and its New Anchor Limited subsidiary, charged with running Baccarat.
In the meantime, a shareholders' meeting set for September 17 has been delayed until after the administrators' report, the company said.
