The Benetton Group Annual Report 1996

22. ACCOUNTS PAYABLE
The composition of and significant changes in this account group during the year are set out below:
Bonds
These consist of the following:
– EuroLire bond, guaranteed by Benetton Group S.p.A., issued on July 29, 1993, by the Dutch subsidiary
Benetton International N.V., for Lire 200,000 million, bearing interest at 4.5% payable annually and
repayable in 1998. The bonds carried 2,520,000 warrants, each giving the holder the right to receive,
at the option of the Company’s management, either (i) one Ordinary Share which the Company
would have to purchase in the stock market, or (ii) an amount in Lire equal to the closing price of one
Ordinary Share on the Milan Stock Exchange (“MSE”). These warrants were exercised at their maturity,
on July 29, 1996.
? ?The net cost of servicing the warrants, about Lire 38,300 million, is recognized on an accrual basis that
reflects the accumulation of interest. The charge for 1996 amounts to about Lire 5,700 million.
– Bonds totaling LuxF 750 million (Lire 35,775 million at the December 31, 1996 exchange rate) were
issued in 1994, by the subsidiary company, Benetton Finance, at a unit price of LuxF 102.25, repayable
on August 4, 1999. Following an operation linked to an interest-rate swap, the bond bears interest at
floating rates which, at year-end, was 8.8%. The bond is guaranteed by Benetton Group S.p.A. and
listed on the Luxembourg Bourse.
– Bond issued on January 27, 1992, by Benetton España S.L. for Ptas 3,000,000,000, equivalent to
Lire 34,986 million at the December 31, 1996 exchange rate. This bond, bearing interest at an annual
rate of 12.10%, was repaid in full on January 27, 1997.
Convertible bonds
– Ten-year bond, issued in 1988 by a Stefani Group company for Lire 300 million. This bond is convertible
at par from January 1, 1998.
Due to banks
Amounts due to banks at the balance sheet date are classified as follows:
12-31-1995 12-31-1996
Current account overdrafts 50,029 34,030
Import/export advances 71,221 53,810
Lines of credit, advances on receivables
and other short-term loans 446,753 698,194
Long-term loans:
- due within 12 months 162,021 18,753
- due beyond 12 months 204,069 80,543
Total 934,093 885,330
Long-term loans include Lire 21,078 million and Lire 153,250 million due beyond five years as of
December 31, 1996 and 1995, respectively.
Amounts due to banks include around Lire 89,296 million secured by mortgages on tangible fixed assets.
Group companies had the following lines of credit available at the balance sheet date: Lire 204 billion
for current account overdrafts, and Lire 4,068 billion for advances on import/export transactions, the
negotiation of trade notes and other short-term loans.
The weighted-average interest rates at year end are as follows:
- Overdrafts 9.58%
- Import/export advances 5.62%
- Advances against receivables and bank receipts 8.31%
- Other short-term borrowings 7.00%