Commitments have been made by existing shareholders, members of the Management Board and a further investor to exercise their subscription rights and/or to take up any shares that are not placed at the stated subscription price for a total volume of 29.05 million euros of the subscription rights issue.
These financing commitments are subject to the condition, amongst others, that the exchange offer for ESCADA AG’s old 2005/2012 bond into new bonds receives the necessary minimum acceptance quota of 80% (referenced to the total 200 million euros nominal value of the old bond).
For further details on the capital increase please consult the prospectus, which the company will make available free of charge following its approval by the BaFin (Bundesanstalt für Finanzdienstleistungsaufsicht – German Federal Financial Supervisory Authority).
The Management Board today has also extended the period of the exchange offer for the old 2005/2012 bond that had been announced on June 26, 2009 in order to permit the simultaneous settlement of both the exchange offer and the subscription. Bond holders now have until August 4, 2009 3 pm CET, instead of July 31, 2009, to accept ESCADA AG′s exchange offer. The other terms of the exchange offer remain unchanged.
FRANKFURT, June 8 (Reuters) – Escada (ESCG.DE) plans to offer bondholders a new bond worth less than the face value of its current debt in about two weeks, the stricken luxury fashion house said on Monday.
Escada, whose gowns are worn by Hollywood stars such as Katie Holmes, has been struggling with falling sales as recession compounds difficulties it is having selling its clothes, which some have labelled old-fashioned.The company has warned that it could go bust as early as July unless it raises fresh capital, cuts debt and secures new loans.A successful exchange of a 200 million euro ($276.6 million) bond that matures in 2012 is key to the rescue plan.German billionaire brothers Wolfgang and Michael Herz — who together hold 24.9 percent of Escada — are willing to inject further capital only if all conditions are met. [ID:nLN401398]Escada had initially aimed to publish the debt exchange offer at the end of May or early June. A spokesman said the delay was due to the complex process of getting the prospectus for the exchange approved, as well as the recent sale of Escada’s mid-price fashion business Primera.
“The timetable for the financial restructuring has not changed,” the spokesman said. “We are still aiming to complete it by the end of July.”
A source close to the matter told Reuters in May that Escada would ask bondholders to accept a new bond worth less than half the face value of its current debt.
Exchanging bonds for debt of a lower value is a trend that emerged in the United States last year. Investors expect the trend to ramp up on the European side of the Atlantic this year.
The sale of Primera will go some way to helping Escada out of difficulty. Nonetheless, the disposal has led to a hefty writedown, pushing Escada further into the red.
Escada has called for an extraordinary shareholder meeting on July 24 as a result