Bernard Auer is now divorced from Ing C Olivetti & Co SpA and is chairman of Olivetti Personal Computers SpA, where he retains only a 12% stake – and he is relishing the freedom of action that gives him, declaring confidently at Hannover that the company should return to profitability within 12 months. He declined to disclose the depths of the floundering company’s losses in 1996, but said that its new investors expect to see the company swing from red to black in a 12-month period. New owner is of course Piedmont International Ltd, a holding company controlled by London-based Amercian lawyer Edward Gottesman. Gottesman specializes in buying struggling companies, either on his own behalf or for an investor consortium, and bringing them back to profitibility. Auer declined to reveal the details of the new shareholder structure, saying it hasn’t been completed. The contracts have been signed but the deal won’t be closed until the end of March or the beginning of April, when the transfer of assets will take place, he said, adding, After that time, detailed information will be made public. According to Reuter, Auer said that all conditions have now been put in place for a continuation of the turnaround started in January 1996, when the company became free-standing from the Olivetti group. We have all the necessary capital and refinancing we need to rejuvenate the company, he said, adding that it now needs to boost basic business growth which was fairly flat in 1995 and 1996: he wants to grow it in line with the market. The recent announcement of a 23% cut in notebook prices should help the company toward this goal, he reckons, adding We are competitively priced, and the overall market trend would indicate a further price reduction as component prices fall. The current gross profit margin in the market totals between 20% and 30%, and some of its product range falls within this band. However, he said that there still is work to be done to raise margins on some products, and he will stress notebooks and servers, the two fastest-growing product areas. Contracts to Olivetti will account for only around 30% of revenue this year, and that proportion will decline as the company builds its network.
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