Rabat - A Turkish company has reportedly expressed interest in rescuing the beleaguered Legler Maroc from collapse.
Rabat – A Turkish company has reportedly expressed interest in rescuing the beleaguered Legler Maroc from collapse.
The announcement was made by Moroccan Minister of Industry Moulay Hafid Elalamy during a consortium on private enterprises and economic growth organized by CGEM, Morocco’s leading conglomerate of businesses in the Casablanca summer university September 28-29.
Although Elalamy did not give any details about the “imminent deal with a Turkish giant” or even the name of the Turkish company, he expressed confidence in the prospects of the deal.
Once completed, Elalamy declared, Legler Maroc’s prestige will be restored so that it can live up to the expectations it garnered at its inception in 2004-2006.
The national textile giant has been struggling for almost a decade.
Hinting at the importance of the expected merger for Morocco’s industrial rehabilitation plan, the industry minister said: “It will be presented before the King once everything is settled.”
But for all the hype surrounding the “imminent signing of the important deal,” firm instructions of secrecy seem to have been given to the people working on the project.
The only thing that is known for sure is that the investor is a Turkish group, a “close source” told Moroccan outlet Medias 24. The source said that the deal could be completed any time. The source added, however: “As long as it is not signed, we cannot say anything more.”
Why is it so important?
Legler SPA, an Italian company and a global household name in the textile industry, engaged in a joint venture with Morocco’s Atlantic Group owned by the Senoussi family, well-known in Moroccan industrial circles.
Legler SPA and Atlantic Group formed Legler Maroc (or LGM Denim), generating an outburst a burst of optimism and quality output for Morocco’s textile industry.
With the experience and prestige of a global brand, the North African kingdom hoped to bring its textile industry to the next level, making it competitive enough to export to other markets. As enthusiasm grew about the merger, many in Morocco started referring to the joint group as “the colossus of Moroccan textile.”
In the wake of the global financial crisis in 2008, however, Legler SPA decided to terminate the venture. The move left the Atlantic Group with the difficult task of sustaining a nascent giant in the face of a deeply uncertain and shaky global financial market.
The company has since lurched from decreasing outputs to near bankruptcy, bringing it to the verge of total collapse in 2016 and 2017, when a number of foreign investors expressed interest in rescuing the collapsing giant.
But no rescue deals have been struck yet. In December 2017, a Moroccan court ordered the auctioning of LGM Denim’s assets in a bid to temper the effects of the company’s impending collapse on Morocco’s economy.
The “imminent deal” is not Legler Maroc’s first experience with Turkish solicitors. In 2011, Bossa Ticaret ve Sanayi Isletmeleri, a Turkish textile giant, was reported to have started merger negotiations with Legler Maroc.
Ahmed Reda Chami—then Morocco’s industry minister—said at the time, “Negotiations with Bossa are on good terms and we expect to complete a deal in [the] coming weeks.” But the merger never happened.
Now that Moulay Elalamy has announced another merger possibility between Legler Maroc and an unnamed Turkish company, many in the industry have started speculating that Bossa is “the unnamed company.”
They suggest that, given the increasing presence of Turkish groups on the Moroccan market—LC Waikiki for example, Bossa may have decided to come back to the negotiating table after all.
But when asked whether Bossa is the name behind the “very important” and “imminent deal,” another “close source” said: “No, as far as I know. Bossa was indeed interested a few years ago, but no conclusions were reached.”