Spanish tannery files for bankruptcy protection
Spanish tannery Fontanellas y Martí has filed for bankruptcy protection at a Barcelona commercial court.
The tannery declared liabilities of EUR 26 million, according to local reports, with 90% of the money being owed to institutions, including Banco Santander and BBVA.
The Igualada-based company, which was established in 1954, has been unable to reach agreement with the banks to refinance its debt, but has said it intends to use administration to achieve that debt-restructuring and stay in business.
Fontanellas y Martí is one of Igualada’s biggest tanneries and a sponsor of a local sports team. It employs 150 people, but has told the court it will reduce its workforce as part of its plan to remain a viable business. It specialises in high-quality leather, mostly for footwear and leathergoods.
In a report on the development, Barcelona’s main newspaper, La Vanguardia, said Fontanellas y Martí had come through Spain’s recent economic crisis relatively well, turning over EUR 45 million in 2012 and setting up its own operation in Vietnam. However, sales in the domestic market have plummeted, reducing turnover in 2013 to EUR 26 million, making its debt problem more acute.
Tanneries are being squeezed both by raw materials suppliers and buyers of leather, as reported in our market intelligence section every two weeks. In November, a tannery based in Italy's Santa Croce sull’Arno announced it was to close.
