Editor’s note: This article was first published in October 2013; the pre-insolvency filing, the refinancing deadline and amount, the failed bond issue and the chairman’s sales forecast for 2015 were current news at that moment.
Zinkia has finally filed for pre-insolvency protection (preconcurso de acreedores) at the Commercial Court of Madrid, according to a regulatory filing it submitted to the CNMV, Spain’s securities market regulator.
Only yesterday we were writing about the serious danger facing this company, whose best-known product is Pocoyo, an animated series for babies that has reached 150 countries around the world but whose business volume has already fallen by almost 50%. Zinkia now has a maximum of four months to negotiate its debt. If it fails to reach an agreement with its creditors to refinance around €10 million, it will have to declare itself insolvent.
Right now, as the CNMV warned, Zinkia does not have the liquidity to meet its obligations, and it has been forced to close its bond issue, which has been a complete failure.
Even so, the company’s chairman insists that, regardless of its current cash-flow problems, Zinkia has great growth potential for its business and brand, with sales forecasts of €45 million for 2015.
However, Zinkia has lost some of its credibility among investors. We don’t doubt its ability to grow as a company, but I personally do doubt its ability to do so with Pocoyo alone: it needs to diversify its business.
Featured image: Jose María Rufo, CC BY-SA 2.0, via Wikimedia Commons.
