In a private placement due to be completed on Dec. 8, Moulin International is selling 54 million new shares to at least 6 independent investment firms to raise net proceeds of HK$295 million (€31.5m?US$38.0m). Moulin intends to use HK$236 million to expand its business in the USA, possibly through mergers or acquisitions, though nothing has been finalized. The balance will be used as working capital.

Company executives have previously been quoted as saying that they are also interested in taking over more brands in Europe, where the Hong Kong-based group already has a strong presence through Metzler International and Filos Group. As previously announced (EWI of Oct. 17), it took over a few weeks ago NiGuRa, a subsidiary of Rodenstock, paying a reported €10 million for this new property.

The company's stock price has more than doubled over the past year, and remained near its 12-month high over the past few days. The new placement will result in Moulin's breaking the terms of its credit facility agreement, enabling lenders to demand immediate repayment of outstanding loans. The agreement would require the company's chairman, Ma Bo Kee, and affiliated parties to be the beneficial owners of at least 35 percent of the shares. Moulin says it has received verbal assurances from a majority of lenders that they will grant the group a waiver of this condition. The issue will result in a 10.8 percent increase in outstanding shares of Moulin. The group's major shareholder, KFL Holdings, and parties acting in concert with it will see their holdings in the company fall from 37.3 to 33.2 percent after the placement and the subscription to the new shares. They are being placed at HK$5.60 each, a 4 percent discount to the Dec. 5 closing price of HK$5.85.

In response to recent reports in the Hong Kong Chinese press stating that the company was planning a tentative disposal of its manufacturing business, Moulin has clarified that it has no intention of doing so. Moulin will gradually down-pedal its ODM/OEM manufacturing business, but this is a plan that has essentially been around since 1995, when the group decided to expand the distribution of branded eyewear, taking over Metzler and Filos in the process. While the distribution business remains the group's revenue driver, management believes that its integrated manufacturing-distribution model will provide a more stable growth environment.

In Europe, meanwhile, Moulin has made a clear distinction between its higher-priced collection and the more value-oriented ones, creating two separate product development and sales networks. The higher-end brands are coordinated Metzler International (Germany), while the lower-end lines are run by a new separately managed Italian subsidiary of Moulin, Metzler International (Italia), which in effect takes the place of the former Filos Group.

Horst Tausz, one of the 3 former members of Metzler's executive board, is now the single CEO of Metzler International (Germany). The former chairman of Metzler's supervisory board, Ulrich Fischer, remains as chairman. Roberto Minozzi, an executive of the former Filos Group, had been appointed as CEO of Metzler International (Italia) but he left the group earlier this week to be replaced by another executive, Joachim Naujoks. As previously reported, Lucio Lozza, another former executive of Filos who had acted lately as Metzler's international marketing manager, left a few months ago and is now working for the Marcolin Group.

The Germany entity is in charge of such brands as Aigner, Marc O'Polo, Metzler, Otto Kern, Paloma Picasso and Van Laack. Moulin runs separately the recently acquired NiGuRa operation with its 4 brands ? NiGuRa, Enjoy, Feraud and Reebok ? maintaining a separate office for them in Germany to continue until the end of 2004 a bonus system that Rodenstock had established with customers who were buying both frames and lenses.

Metzler International (Italia)'s brand portfolio includes Enrico Coveri, Filos, Giordano, Kappa, Krizia, Red Rose, Revlon, Robe di Kappa, Sisley, Superga and United Colors of Benetton. It doesn't have the Vivienne Westwood and Les Copains licenses anymore. The German Metzler dropped two other minor licenses recently, Bernd Berger and Viventy. On the other hand, the group continues to sell Jeff Banks eyewear in the UK and Hong Kong and the Fratelli Lozza line in the USA.