Struggling luxury fashion house Escada AG today (10 August) warned it may be forced to file for insolvency later this week if shareholders don't agree to a EUR200m bond exchange offer tomorrow.

The deal requires at least 80% of bondholders to agree to the new offer, which would give them EUR400 (US$566.7) and ten shares in exchange for each EUR1,000 of the value of the old bond.

At least 80% of bondholders have to agree to the new offer.

Escada's board is due to meet on Wednesday to discuss the next steps if the financial restructuring fails.

The company is desperately trying to restructure its business as it runs out of money, with measures including the sale of one of its divisions. In April this year its debts stood at EUR187.6m.

"Given the company's liquidity situation, the exchange period cannot be extended any further, nor is it possible to improve the offer again," Escada said today in a statement.