Your browser is no longer supported. For the best experience of this website, please upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Escada teeters on the brink

German fashion house Escada has said that it will file for insolvency later this week if a crucial part of its financial restructuring program is not successful.

The retailer said that it will have to file for insolvency if its bond exchange offer fails to reach an 80% acceptance rate.

The tender period for the bond exchange of €200m (£171.9m) expires today at 3pm European Standard Time. The offer has already been extended, but Escada said that it is not possible to extend it further given the group’s imminent illiquidity.

The results of the offer are set to be unveiled on Wednesday and the retailer will meet tomorrow to determine what steps to take if the restructuring fails.

Bondholders are being given €400 (£344) and 10 Escada shares per €1,000 (£860) of debt. The restructuring is needed to set up future credit lines and allow the planned capital increase to go through.

By mid-July, the bond offer had reached an acceptance rate of 37%, according to Escada. The company is required to inform investors once it has reached 50% acceptance.

In early July, Escada revealed that talks had taken place with insolvency experts in a bid to stave off insolvency. Chairman Bruno Saelzer told a German newspaper that the group had enough liquidity to last until August but not beyond.

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.