BERLIN — It’s the 11th hour for Escada AG. The German fashion house said Monday it would file for insolvency later this week if its bond exchange offer fails to reach an 80 percent acceptance rate.
The tender period for the bond exchange of 200 million euros, or $287 million at current exchange, expires today at 3 p.m. European Standard Time. The offer has already been improved and extended, but Escada said given the company’s imminent illiquidity, it is not possible to do so again.
Results of the offer aren’t expected to be known until Wednesday, however. Escada’s supervisory and management boards will meet Wednesday to determine what further steps to take if the financial restructuring fails.
Under the improved exchange offer, bondholders are being given 400 euros, or $572, and 10 Escada shares per 1,000 euros, or $1,430, of debt. The exchange is a crucial part of Escada’s financial restructuring program, and is required to set up future credit lines as well as permitting the planned capital increase to go through.
In mid-July, Escada said the bond offer had reached an acceptance rate of 37 percent. The company is required to inform investors once it has reached 50 percent backing.
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