SMCP Shareholder Battle Heats Up as Bondholders Challenge Stake Disposal
05 November 2021 - 12:39PM
Dow Jones News
By Joshua Kirby
SMCP SAS risks getting caught in the middle of a legal battle
after its new largest shareholder filed a bankruptcy petition
against the French fashion group's former parent and suggested a
stake sale by the latter may have been unlawful.
Bond trustee Glas, which last month took a 29% stake in SMCP
from former majority shareholder European TopSoho, said Friday that
it has served a bankruptcy petition against the Luxembourg-based
company. European TopSoho is a holding subsidiary of Chinese
apparel conglomerate Shandong Ruyi Technology Group.
Glas, which represents bondholders including Blackrock Inc.,
took control of the shares after European TopSoho failed to redeem
bonds worth 250 million euros ($289 million) due at the end of
September.
On Thursday, SMCP said European TopSoho had sold a further stake
of around 12 million shares to an unidentified third party,
reducing its interest to 8%. According to Glas, European TopSoho
hasn't made the relevant threshold-crossing disclosures to the
French capital-markets authority.
In light of this and the bankruptcy filing, it is "possible that
the purported disposal by European TopSoho is unlawful and
prejudicial to its creditors," Glas said.
"As trustee, we continue to reserve our rights in full and will
take all measures necessary to preserve the interests of all
bondholders," the company added.
SMCP declined to comment on the development, while European
TopSoho and Shandong Ruyi didn't respond to a request for
comment.
Glas last week called for an SMCP shareholders' meeting to be
convened, with the agenda to include the dismissal of all European
TopSoho and Shandong Ruyi representatives from the company's board.
The trustee has meanwhile appointed a receiver to sell its shares
to a third party.
Write to Joshua Kirby at joshua.kirby@wsj.com;
@joshualeokirby
(END) Dow Jones Newswires
November 05, 2021 07:24 ET (11:24 GMT)
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