Insolvent German women’s wear retailer Gerry Weber International has struck an investment agreement with asset management firms Robus Capital Management and Whitebox Advisors in what it calls a “milestone” in securing the company’s future.
Gerry Weber International, which employs about 580 staff, entered into preliminary insolvency proceedings in January after negotiations with its financing partners broke down, and has since been restructuring its business. Earlier this month, Robus Capital took an 88% share in the retailer’s core Hallhuber unit.
The next step will see Robus and Whitebox provide up to EUR49.2m (US$55.2m) for the financial restructuring of Gerry Weber, while the retailer’s creditors may, in principle, choose between a cash compensation and “various financial instruments for value recovery.”
Creditors are expected to approve the insolvency plan during the third quarter of 2019 – and the company hopes to conclude the insolvency proceedings in late autumn. The transaction is also subject to the approval of a separate insolvency plan for Gerry Weber Retail, a subsidiary of Gerry Weber International.
A key element of the insolvency plan is a capital reduction to prospectively zero euros as well as a subsequent cash capital increase. The new shares will be entirely acquired by Robus and Whitebox.
“Today’s binding agreements provides clarity and security for our customers, business partners and suppliers, and staff,” says Johannes Ehling, spokesman of the managing board of Gerry Weber International. “Now, and with new vigour, we can continue with the further implementation of our operative repositioning and restructuring.
Shares in the retailer were down by more than 34% this morning (16 July).