Thursday, July 5, 2012
Praktiker, Investors Agree On Rescue Plan
Thu., July 5, 2012
Praktiker AG, the struggling German DIY chain, and its major investors struck a compromise late on Wednesday in a last-ditch attempt to stave off bankruptcy, Reuters reported. Fund manager Isabella de Krassny, whose backers held a majority at Praktiker's annual shareholders' meeting on Wednesday, said she was now backing management's restructuring plan after insisting earlier for approval of her own plan. In return, Praktiker bowed to shareholders' demands to replace two supervisory board members with candidates backed by de Krassny. Praktiker said Kay Hafner and Ebbe Pelle Jacobsen were stepping down as supervisory board members with immediate effect. During the shareholders meeting, de Krassny had stepped up her opposition to the company's rescue plan, to which management had said there was no alternative. "We demand the resignation at least of all the supervisory board members," de Krassny told the meeting. De Krassny said the investors in her camp, which include big shareholders Maseltov and Semper Constantia, have the management experience to lead the company and access to at least 55 million euros ($69.3 million) in financing. Praktiker had been seeking shareholder permission to raise up to 60 million euros in a capital increase and accept an 85 million euro loan from U.S. investor Anchorage. In exchange, Anchorage would gain options for 15 percent of Praktiker's stock, a plan that has angered shareholders. Before the meeting, Praktiker, in a letter to shareholders posted on its website, said there was no other investor in sight and that the financing concept was fair. "The company otherwise faces immediate bankruptcy", it warned. The group was also planning to agree bank loans of up to 95 million euros. Read more.