Citing two years of poor consumer demand, credit restrictions and the inability to go ahead with unspecified planned divestitures, the board of directors of Indo decided last June 17 to file for voluntary Chapter 11 protection from creditors. Trading in the Spanish company's shares on the Madrid stock exchange has been suspended, but the management said that its operations would continue normally, and that it was preparing a business plan that would involve deeper cooperation with other international groups.

As reported in mid-2008, Indo had sought an alliance with the Buchmann group in the area of equipment, but it did not work out. It subsequently struck an agreement with Hoya Vision Care for an exchange of products and technology. It is now being speculated that Indo may want to shed one or two of the three components of its business ? equipment, lenses or frames ? and concentrate on fewer activities like the majority of its competitors.

Indo reported net debt of €35 million against equity of €13 million at the end of 2009. Debt grew to €37 million at the end of March, after a quarter in which Indo's net profit losses increased to €10.77 million from €4.6 million in the same period a year ago. Extraordinary charges of €9 million linked to the shutdown of a lens laboratory at Alcobendas and a frame production factory at Tortosa were the only reason for the deterioration.

In fact, the operating loss before amortization and depreciation (Ebitda) declined by 7 percent to €2.9 million in the quarter, despite a 6.5 percent drop in total revenues to €23.2 million. The decline was attributed to weaker consumption in Spain and other European countries, which mainly affected Indo's sales of frames and sunglasses, and to a smaller extent its sales of lenses. The company's sales of equipment grew by 7 percent and its new retail activities contributed revenues of €1.9 million.

The company told shareholders that it was still planning to launch a new patented line of progressive lenses in September, called Maxima. In the equipment sector, Indo will add three tracers.

Indo's annual shareholders' meeting earlier this week re-elected the board without any changes, a spokesperson of the group said.