Groupon Contemplates Italy Exit Amid Court Decision Fallout

29 Apr, 2024

Groupon Contemplates Italy Exit Amid Court Decision Fallout

A unit of Groupon in Italy is contemplating ceasing operations in the country following a court ruling that mandated it to pay approximately EUR69 million ($73.3 million) to the government over a tax dispute, currently under appeal.

According to a regulatory filing on Monday, Groupon SRL, specializing in local voucher services in Italy, sought to suspend a required bond during the appeal process, which was denied. Consequently, it must now post a EUR21 million bond immediately and an additional EUR48 million by October 22, a financial strain given its liquidity.

This situation has led to tax authorities placing a lien on the subsidiary's bank account, resulting in halted transactions and a monthly loss of about EUR1 million. Groupon is exploring various options, including negotiating with authorities, halting local operations, or restructuring to exit the market, while affirming that its online marketplace in Italy will remain unaffected.

Despite maintaining its belief in the meritlessness of the tax assessment and committing to continue the legal battle if the appeal fails, Groupon reassured investors about its financial stability. It expects no adverse impact on its ability to meet obligations, reaffirming its full-year forecast and anticipating strong first-quarter revenue