A transaction involving the bookstore chain, one of the last businesses still in the entrepreneur’s portfolio, could be concluded this autumn at the earliest.
“Currently we are at a stage where we are presenting Diverta to interested investors. They are bookstore chains from the West, a local rival, as well as Romanian entrepreneurs with no connection to book retail, who are drawn by the force of the Diverta brand. We already have a pre-agreement, but the door is still open,” Octavian Radu told ZF. He did not give the name of the investors interested or the price he was considering.
In 2010, Diverta filed for its insolvency with debts of over EUR10 million and investment loans of EUR8.5 million. At the time the company operated a 62-bookstore chain which covered 24,000 sq m.
The sales of the Diverta chain are registered to Pro Express Retail, which had an estimated turnover of EUR14 million last year, according to the latest data available.
The store chain halved
The company went through judicial reorganization, which entailed payment of some debts to creditors, continuing the company’s activity and making it more efficient. The closure of half the bookstores (which went from 62 units to 31 stores last year) also led to cuts in employee numbers from 400 to 200-250 people.
“We are still at the stage of negotiating the price. After we end the road show to present Diverta, we will request a non-binding offer and only then start the final negotiation stage. We hope to be able to finalize in autumn, but experience tells me such processes can sometimes take much longer. But I am very optimistic because of the significant interest,” he says.
Radu also says 2013 is the first year when Diverta is showing signs of growth after four years of turnover decline.
“We managed to achieve an extensive restructuring of Diverta’s loans, so they reached a sustainable level [without specifying the level]. But we need financial resources in order to boost our working capital, expand and streamline our product range, and introduce new concepts,” the businessman said.
On the book retail market Diverta competes against Carturesti bookstores, the Humanitas chain and Compania de Librarii Bucuresti, with the book market being estimated at EUR70-80 million per year.
(English version by Daniela Stoican)