Tolomei relaunches Le Tanneur after becoming majority shareholder

Tolomei will become the majority stake holder at Le Tanneur &Cie at the end of the year, after having carried out a reserved capital increase of 2.50 euros per share, the current share price. The operation will see the company’s current owner’s stake reduced to 42.6 percent, leaving Tolomei with 50.2 percent of the capital of the tannery.

Once the agreement is fully implemented – scheduled for the end of this year - Tolomei will receive a reserved capital increase of 10.8 million euros. The next step will be to take out a public offering of shares (to which QLG has already said it will not come) under the same conditions, in accordance with the regulations.

As soon as this process is completed, Qatar Luxury Group will resign from the role it assumed as a majority shareholder in Le Tanneur & Cie back in 2011.

Le Tanneur will undergo a second re-capitalisation at the end of the year, estimated at 2.5-3.5 million euros

At the end of the year, the leather goods manufacturer registered in Euronext C will undergo a second recapitalisation: the new majority shareholder will carry out a second capital increase, which will guarantee control of the totality of the French company’s shareholding. This new provision will lead to a re-injection of cash estimated to come in between 2.5 million and 3.5 million euros.

The operations are aimed at improving the company's outlook, including the repayment of the loan taken by QLG and amounting to about 9.5 million euros. The capital increase is expected to take place at the end of September and the other two operations (PAHO and additional capital increase) will reach the end of the year.

Le Tanneur shares were suspended on the Paris Stock Exchange on Wednesday 2 August.

The financial results of Tanneur & Cie. have been full of ups and downs in recent years. Thus, while in 2011 and 2012 the turnover stood at 64 million euros, in 2016 fell to 53.8 million euros, with an operating loss of 0.79 million euros. The last exercise has been tough, marked by a 6.8 percent decrease in sales to other luxury powerhouses (sales accounting for 54 percent of its business).

In the last twelve months, the opening of a small leather production line at its Corrèze plant led to a drop in productivity and a related cut of average sales prices. Its own activity (under the brands Le TANNEUR and SoCo) experienced a dip in the revenue item of 3.8 percent. In a call with analysts after presenting its 2016 results, the Le Tanneur’s management team recognised the need to consolidate the range of its brand products and create new export opportunities, especially in Asia.

Tanner, founded in 1898, has been heavily penalised for its high exposure to the French market, one of the most competitive for the leather goods sector.

Qatar Luxury Group controls 1.03 percent of the capital of LVMH, which entered in 2012 with its investment fund, Qatar Holding.

Photo:TANNEUR 2017, Le Tanneur Web