Natuzzi (NTZ) Stock Is Squeezing The Shorts

Natuzzi NTZ Stock News

Natuzzi, S.p.A (NYSE: NTZ) is making a run for the top in the market this morning, and for good reason. The company announced that it has renewed its Securitization Facility, relieving funding concerns, sending the stock for the top, and triggering a short squeeze. Here’s what’s going on:

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NTZ Stock Announces The Renewal Of The Securitization Facility

In the press release, Natuzzi said that on July 23, it renewed its accounts-receivables securitization facility. The facility was renewed with an affiliate of Intesa Sanpaolo and will provide the facility for an additional five-year period.

In the release, NTZ reminded investors that it originally entered into the Securitization Facility in July of 2015. The Facility allows the company to assign trade receivables to the Assignee for a maximum amount of €40.0 million, on a revolving credit basis and maintaining a limited risk in the assigned trade receivables.

This facility is important for the company because it provides it with a stable source of liquidity. Due to the renewal, the company is now entitled to a wider range of trade receivables, therefore, adding flexibility to its funding capacity.

In a statement, Vittorio Notarpietro, CFO at NTZ, had the following to offer:

We are pleased for this continuing and fruitful collaboration with our main financial partner. The renewal of the securitization program under more attractive terms reflects both the high quality of our customers’ portfolio and the Company’s ability to effectively access the capital markets. As we continue to implement our retail-based strategy and restructure our operations, it is extremely important to rely on a multi-year and efficient funding scheme, especially in times of uncertainty such as the current one.

This Is Huge News

First and foremost, Natuzzi has been facing heavy short interest as of late due to the fears surrounding the loss of this facility. As such, with the announcment, we saw a bit of an early run, followed by dramatic gains as short sellers begin to abandon their positions in a short squeeze.

With the facility now renewed, liquidity is no longer a concern, and the company will be able to continue forward with business as usual. That’s great news for NTZ, making the stock one to watch closely.

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