Dragos Cinca, founder of electronics and home appliances retailer Flamingo, handed over the company's management to the Adamescu family fifteen years after founding it, and now plans to exit the business completely in 2011.
"I will ponder this matter, having set myself 2011 as a deadline. Until then we need to have suitable people to handle the company and I trust the company's new leadership and Mr. Adamescu," said Cinca.
However, for the time being, the shareholders are more involved in management than in previous years, after they had to renegotiate contracts with partners personally.
"The extent of the crisis was partly accountable for this. The management worked, but the negotiating power moved to banks, shareholders, and retail space developers," he explained.
Cinca, Dan Adamescu and Alexandru Tiriac hold over 70% of Flamingo shares.
After recording a 45% sales decline over the last few months and over 5 million euros in losses, Flamingo is struggling to breathe with the aid of the refinancing plan put together by its shareholders, which entails a 7 million-euro bond issue and help from partner banks. "Banks committed in writing to contribute 10 million euros to the financing plan, in addition to the 7 million euros of the shareholders."
Dragos Cinca says he left the company's management in the hands of the Adamescu family because he wants to become involved in other projects, after being active in the restructuring of the electronics and home appliances retailer over the last few months.
Dragos Cinca, Dan Adamescu and Alexandru Tiriac, the main shareholders of Flamingo International (FLA) have set a 15% increase target for the company's turnover in 2010, after the company lost millions of euros and posted a 40% sales decline in the first half of this year.
Although Cinca boosted his stake by 1.6% to 27.2% last week,
