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Escada plans rights issue rescue

Escada, the German luxury womenswear group, has launched plans to raise €29 million (£25.1m) in a rights issue in a bid to stave off insolvency.

Escada said it would offer shareholders one new bond for every two they currently own, representing 40% of the value of the old bond, in a bid to reduce the debt in the company.

The capital raising is conditional on 80% of Escada shareholders agreeing to the restructuring of their bonds and just 37% of shareholders are thought to have agreed to the restructuring so far. Escada has extended the tendering deadline from July 31 to August 4.

Escada chief executive Bruno Saelzer, told a German newspaper earlier this month that Escada was in talks with insolvency experts and if the restructuring fails it was “inevitable” that Escada would cease trading.

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