- Superdry plans a four-week auction if creditors reject restructuring
- Founder Julian Dunkerton offers up to £10m to prevent insolvency
- Creditors must approve the plan, or a pre-pack administration follows
If creditors refuse to approve a restructuring plan, the fashion chain would likely conduct a four-week auction, which would likely lead to a pre-pack administration.
In the event that creditors obstruct its founder’s intention to inject up to £10m of his own money into the fashion chain in order to prevent insolvency, Superdry is preparing to conduct an emergency four-week sale process.
If creditors do not approve a restructuring plan in the upcoming weeks, the accelerated M&A process will be initiated.
Under the proposed survival plan, Julian Dunkerton would contribute either £8m in an open offer that is available to other shareholders or £10m in a place that is exclusively available to him.
The share sale would precede Superdry’s delisting from the London Stock Exchange.
In the upcoming weeks, creditors, including landlords, would be required to approve the restructuring plan.
A pre-pack administration deal is the most probable outcome of a four-week sale procedure for Superdry following the rejection of the restructuring plan.
According to sources, Mr. Dunkerton’s confidence in the company’s revival prospects was evident in his willingness to invest a significant portion of his personal wealth in it.
In recent months, Superdry’s shares have plummeted to a succession of record lows as a result of a failed sale process and dire trading conditions.
Superdry’s flagship store in central London is owned by M&G, an asset manager contemplating challenging its rescue plan.
It is speculated that M&G was concerned about the lack of involvement in a mechanism that would have enabled creditors to capitalize on any future improvements in the retailer’s performance.
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The restructuring plan will not result in the imminent closure of shops; however, it will require landlords of numerous Superdry outlets to implement substantial rent reductions.
In addition, sources have indicated that the organization intends to withdraw from numerous foreign markets, including the United States…
The indebted company’s market capitalization was less than £7m, as shares were trading at approximately 6.7p on Tuesday morning.
It recently reached an agreement with Hilco Capital, one of its current lenders, to increase its financing capacity. Additionally, it is indebted to Bantry Bay for tens of millions of pounds.
Just under 30% of the shares are owned by Mr. Dunkerton, who returned to the corporation in 2019 after being ousted.
Superdry has recently raised funds by selling its brand in regions such as India and Asia-Pacific.
