The Board of Directors of The Italian Sea Group are to accept a €25 million loan from the company’s majority shareholder.
The board has acknowledged budget overruns affecting the majority of projects currently in progress – works are proceeding on schedule and in line with expected timelines and quality standards.
In a statement, the board explained that the overruns have adversely impacted TISG’s cash position, primarily as a result of the consequent reduction in operating margins, combined with the need to continue funding production costs for ongoing projects.
The ‘financial strengthening measure’ has been made in light of the expected market recovery – as confirmed by the recent execution of two new contracts for the construction of giga-yachts exceeding 80 meters in length.
Audit of operational management
In addition, the directors have resolved to ascertain the underlying causes through an independent and comprehensive audit of operational management and ongoing projects and to develop a plan to strengthen the Group’s capital structure.
The loan will be disbursed by GCH which currently holds 53.6% of TISG’s share capital, with Giovanni Costantino, TISG chief executive officer holding 100% of GCH’s share capital, indirectly controlling 53.6% of the company’s share capital.
The loan will be interest-free with no fees payable.
TISG will repay the loan in one or more installment by 31 December 2032.
