Marcolin and LVMH have entered into a joint venture agreement in respect of the proposed JV (jont venture) with LVMH pursuant to which, subject to certain conditions and approvals, the proposed JV will, starting in 2018, design and manufacture eyewear for the Céline and Louis Vuitton brands, with aim of becoming, in the future, the preferred partner of LVMH in the eyewear business.
LVMH and Marcolin will control, respectively, 51% and 49% of the share capital of the proposed JV. In total, Marcolin’s equity contributions to the start-up costs, capital expenditures and working capital requirements of the JV will be between €20 million and €25 million over the course of the next four to five years, of which Marcolin expects to fund approximately €7 million in 2017.
Pursuant to the JVA, the capital requirements of the JV will be funded as and when required by direct or indirect pro rata equity contributions by Marcolin and LVMH and/or debt financing incurred by the JV for a maximum amount of €45 million (or 50% of the JV’s financing needs), which is expected to be non-recourse with respect to Marcolin and its subsidiaries. Marcolin will also provide distribution and transitional and other support services required in connection with setting up the JV.