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UPDATE 1-Australia's OrotonGroup explores options after expressions of interest

Published 20/06/2017, 01:08 pm
© Reuters.  UPDATE 1-Australia's OrotonGroup explores options after expressions of interest
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(Adds details on strategic options being explored)

June 20 (Reuters) - Australia's OrotonGroup Ltd ORL.AX , a maker of luxury handbags, said on Tuesday it has received expressions of interest that could involve a sale of the company and plans to begin a formal process to explore its options.

The interest comes after it hired investment bank Moelis & Co in May to run a strategic review.

"Following that announcement, numerous parties have expressed interest in exploring certain strategic options which may involve a sale, refinancing of debt facilities or recapitalisation," it said in a statement.

It added that it may invite additional parties to participate in the process.

The company, which also has a joint venture with U.S. clothing brand Gap GPS.N in Australia, has been hammered by fierce competition from international rivals like Coach COH.N , and said "market conditions remain very competitive and challenging, and difficult to forecast."

Oroton's shares rose 4.4 percent on Tuesday after the announcement, giving the company a market value of A$45 million.

It also said it has received up to A$3 million in credit support from J. Will Vicars, one of its major shareholders and former director and is in talks with long time lender, Westpac Banking Corp WBC.AX , over the terms of a A$35 million facility that expires in April 2018.

Oroton, which began in 1938 as an international fashion textile importer, left its earnings guidance unchanged. It has forecast full-year earnings before interest, tax, depreciation and amortisation at A$2 million to A$3 million ($1.5 million- $2.3 million). ($1 = 1.3180 Australian dollars)

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