Local authorities and the labor unions have signed an agreement in principle to support a business plan presented by Ital Lenti of Belluno last Jan. 19 to start up again production of ophthalmic lenses under the Galileo brand name at a new industrial plant at Marghera, near Venice. Besides taking over the Galileo brand name, Ital Lenti is also purchasing Galileo Italia's factory near Milan and what is left of the Galileo holding company's headquarters in Venice for a total of 11 billion lire (e5.7m).
Ital Lenti's industrial plan is expected to bring the total number of Galileo's employees in Italy within 4 years to 97, including 65 based in Marghera, which is presently shut down, and the others at the more efficient Settimo Milanese plant. The approval of Ital Lenti's business plan paves the way for financial aid by the local authorities and commits the workforce in Marghera to stop demonstrating to preserve their jobs. The 3-stage plan calls for a near doubling in annual sales of treated prescription lenses, manufactured at a new factory due to be built in Marghera, from 9,660 million lire in the first phase to 18,231 million lire (e9.4m) in the third one. Including other types of lenses, overall sales generated through the local factories should increase from 16.2 to 30.4 billion lire (e15.7m).
Ital Lenti proposes to invest 10 percent of the budgeted turnover, with half the amount stemming from soft loans carrying an annual interest rate of 6 percent. Ital Lenti has already planned to invest 5.9 billion lire (e3m) on the new industrial project this year. It will add investments of 10.2 billion lire (e5.3m) in the first phase to start the production again in Marghera, about 6 months after the city of Venice assigns a suitable site for construction of the new factory. Another 15.2 billion lire (e7.9m) will be spent in the second 12-month phase, which should start up around February of 2001. The third phase will last 30 months, involving additional investments of 15.4 billion lire (e8m).
Technically, Galileo's Italian facilities are still the property of Signet Armorlite of the USA, which is in turn still controlled by Galileo's holding company, Galileo Industrie Ottiche. Signet is still trying to regain its financial independence, while maintaining ownership of Galileo's companies in France, Germany and Spain. There are unconfirmed rumors that Signet is about to go through a refinancing and management buyout plan supported by institutional investors that will allow it to get out of the control of the Galileo holding company, which would be liquidated. Itainvest, the Italian state investment company that is one of Galileo's major shareholders along with a bank pool, will not confirm these rumors. Anyway, the acquisition of Galileo's Italian operations by Ital Lenti will allow Itainvest to get back 7 billion lire (e3.5m) previously lent to finance Galileo's day-to-day operations.
Ital Lenti is a company based in Italy's major eyewear manufacturing district that employs 58 workers. Led by Leo Polzotto, it reached a turnover of 10.8 billion lire (e5.6m) in 1998, or 7 percent more than in 1997. About 60 percent of the turnover is in Italy, 35 percent in the rest of Europe and 5 percent in other countries outside the European Union. In the first 9 months of 1999, its turnover reached 8.7 billion lire (e4.5m). The debt-to-equity ratio significant, but it fell from 11.3 percent at the end of 1998 to only 1.5 percent last Sept. 30. The company's production is focused on anti-reflective treatments and on customized lenses.