The Art of the Comeback Has Fallen Wunderkind Dabble in Lingerie

(Bloomberg) -- Lars Windhorst, the one-time wunderkind who survived two business failures and a close call last year, is looking for another comeback.

The German financier is contacting potential investors for a new 250 million-euro ($304 million) bond, according to people familiar with the matter, who asked not to be identified because the discussions are private. Windhorst plans to use the proceeds of a sale to fund the turnaround of La Perla, the struggling lingerie maker he took over in February from Italian entrepreneur and former business partner Silvio Scaglia, the people said.

The Art of the Comeback Has Fallen Wunderkind Dabble in Lingerie

Windhorst bought La Perla for an undisclosed amount after talks collapsed between Scaglia, who’d acquired it for 69 million euros in a pre-bankruptcy auction in 2013, and China’s Fosun International Ltd. It was the most high-profile purchase since Windhorst settled lawsuits, overhauled his holding company, Sapinda, and restructured the debt of the several firms he controls after a liquidity crisis and failed deal with an Abu Dhabi fund in 2016.

La Perla, founded in Bologna in 1954, reported a 90.5 million-euro loss before interest, tax, depreciation and amortization in 2017, according to bond sale documents. The company would just about break even next year with Windhorst’s projections of about 25 percent sales growth and 35 percent cost cuts, according to a presentation addressed to “friends and investors.”

Preliminary Orders

Windhorst has received 150 million euros of preliminary binding orders for a five-year senior secured bond paying 7.25 percent, and may sell as much as 500 million euros of notes, he said in an email. He hired Bain & Co. to advise on strategy and is preparing to add to the management team with an aim of reviving La Perla’s brand and quadrupling sales by 2022, according to the email and presentation.

An official at Bain & Co. was not immediately available to comment on its involvement. Windhorst and external spokesmen for Sapinda and La Perla declined to comment on the bond sale.

“Since our acquisition in February, we’ve embarked on a number of strategic initiatives to improve inventory management and the product offering,” Alistair Kellie, the spokesman for Sapinda, said in an email. “This, combined with some immediate steps to drive efficiencies across the business, have made it profitable. Going forward, we will continue to build on the strong global platform with focused capital investments and expect to reach our target sales growth.”

Bond Proceeds

Windhorst said he’d use the proceeds of the bond sale to restructure La Perla’s business, open new stores in the Americas and Asia and refurbish existing outlets, according to the presentation. It would also provide a 60 million-euro working capital buffer, as the 400 million-euro credit facility made available by Scaglia was partially repaid and written off as part of the acquisition deal, the people familiar with the matter said.

As with previous deals, the bond is being marketed to investors close to Windhorst, they said. The 1 billion euros issued by Sapinda Invest in 2014 and notes issued by Sequa Petroleum NV, Ichor Coal NV and Amatheon Agri Holding NV were only partially sold and mostly held by Windhorst and Sapinda, the people said.

Small amounts were sold through brokers to high-net worth individuals, family offices and other funds with the promise that Windhorst would buy them back. He reneged on about 200 million euros of those repurchases when declining oil and commodity prices hurt Sapinda’s biggest investments, leading to a string of lawsuits from investors including Scaglia, billionaire Len Blavatnik and Assicurazioni Generali SpA in 2016 and 2017.

Business Failures

The 41-year-old businessman became a symbol of entrepreneurship when German Chancellor Helmut Kohl took him along on an official trip to Asia in 1995. The prodigy phase of his career ended with the bursting of the dot-com bubble, and by the age of 27 he’d filed for personal bankruptcy. Less than six years later, during the global financial crisis, his Berlin-based investment firm Vatas Holding GmbH ran into trouble and filed for insolvency.

Still, loyal investors have stuck with Windhorst through turbulent times. He was able to overhaul debt, settle lawsuits out of court and keep Sapinda afloat because of support from backers including H2O Asset Management and Blue Bay Asset Management, which contributed to a rescue loan in December 2016 and a bond refinancing in August, the people said. A representative for H2O declined to comment, while an official at BlueBay wasn’t available to comment.

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