ORPHANIDES Supermarkets’ hopes for a reprieve appeared to have been dashed yesterday after its main creditors reportedly rejected the appointment of an administrator to oversee the company’s restructuring.
The news came as the company, in the red for well over €200m, announced it was temporarily shutting down 11 stores across the island amid depleting stocks.
Citing sources, the state broadcaster said last night both Popular Bank and Bank of Cyprus turned down the company’s proposal to appoint Andreas Andronikou, of UK auditing firm UHY Hacker Young, as administrator.
The banks were however said to be open to a proposal put forth by the chain’s suppliers envisaging a joint buyout of the company and using future dividends to gradually recoup what they are owed by Orphanides.
Earlier in the day, the company pleaded with the banks to quickly approve the appointment of Andronikou to prevent the chain from being wound up.
The company’s general manager Constantinos Ioannou urged the banks to act swiftly: “The company is a step before final closure, and we desperately await the banks to make up their minds on whether an administrator will be appointed and if they will back the company,” he told online news portal Stockwatch.
Ioannou said 11 stores suspended their operation yesterday, as these had “no products to sell, and so their continued operation is pointless”.
One store shut down in Paphos, three in the Limassol district, three more in Larnaca, and four in the Nicosia district.
Around 250 employees were sent home on unpaid leave, reports said.
Announcing last week that it was going into receivership, the company said it was seeking a new buyer. The largest supermarket chain on the island is indebted to banks to the tune of €140m or €150m; additionally it owes suppliers €85m and €10m to other creditors. It posted a loss of €17.7m for the first three quarters of the year.
In trying to convince the banks to back the move, the company argued that it is too big to fail, reports said. The chain was said to be hoping for a small cash injection until such time as it could sell its assets or commercial operations, or both. Lenders, however, remained sceptical.
In addition to the hundreds of supermarket employees whose jobs are on the line, a number of suppliers have been left in the lurch; the company’s demise would trigger a chain reaction, impacting merchants and leading to more layoffs.
An estimated 1,250 people are on Orphanides’ payroll, while some 2,000 more - such as drivers and packers - work on the supply end.