Struggling luggage maker Samsonite has received $175 million in funding from CVC Capital Partners. CVC bought the company in 2007 for $1.7 billion and decided to inject the money into the business. The Royal Bank of Scotland did a debt for equity swap and took a minority stake in the business.
Samsonite had been hit hard by a decline in travel due to the credit crunch, and, as a result, had risked breaching its banking covenants with RBS this summer.
Negotiations to save the ailing brand had been taking place since January, and reports were circulating that Samsonite was ready to go into administration, the U.K. equivalent of Chapter 11.
Last month, Samsonite sold Lambertson Truex to Tiffany & Co. after putting it up for sale in December, and, earlier this year, Tim Parker was named as executive chairman of the brand.
Parker, well-known for his cost-cutting strategies and his restructuring experience, was formerly chief executive of CVC companies AA and Kwik-Fit.
An industry source familiar with the situation said Samsonite was now on "firm footing" and "nowhere near" Chapter 11. "The problem has been resolved," the source said. CVC and RBS spokesmen both declined to comment on Monday.
CVC will owne 60% of Samsonite with RBS Group holding a minority share. RBS has had its own share of financial problems. It is now mostly owned by the
British government after requiring a bailout.
