Aug 12, 2009
Bond swap failure pushes Escada shares down by half
Aug 12, 2009
FRANKFURT, Aug 12 (Reuters) - Shares in German luxury fashion house Escada (ESCG.DE) slumped around 50 percent on Wednesday 12 August after the company's crucial bond exchange flopped.
Escada Fall-Winter 2009 - Photo: www.escada.com
Escada said late on Tuesday 11 August it had failed to get sufficient backing for its debt swap plans and that it would file for insolvency this week.
The company's supervisory board is due to meet later in the day to discuss the next steps.
Escada shares plunged 45.2 percent to 0.84 euros by 0726 GMT, having fallen as low as 0.76 euros earlier -- a far cry from its all-time high in March 2001 at 43.54 euros.
"With yesterday's development, betting on a last-minute rescue at Escada seems no longer a viable option," Equinet analyst Ingbert Faust wrote in a note to clients.
The collapse of Escada, known for draping stars like Christy Turlington and Katie Holmes, comes after French fashion house Christian Lacroix filed for creditor protection in May, hit hard by the global downturn in consumer spending.
(Reporting by Myria Mildenberger and Eva Kuehnen; Editing by Michael Shields)
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