Group of Takko €285M SSN, €225M FRNs Hire Houlihan Lokey, Freshfields After Retailer Suspends Coupon Payment, Appoints One Square Advisors; Gleiss Lutz; Notes Collapse 30 Pts to 20

Relevant Document:
Full Covenant Report SSN 2023

German fashion retailer Takko announced it will suspend interest payments on its bonds and appointed One Square Advisors and Gleiss Lutz to advise in debt negotiations, according to sources. A 30-day grace period applies, which will allow the company and its creditors time to negotiate. The company’s bonds fell about 30 points and were quoted at 20 this morning.

Some of Takko €285 million senior secured and €225 million floating rate senior secured noteholders have formed a group and hired Houlihan Lokey and Freshfields Bruckhaus Deringer as financial and legal advisers, respectively, sources told Reorg.

After the expiration of the grace period, the notes can be accelerated by 30% of noteholders.

The ad hoc group represents over 25% of the aggregate bonds and Houlihan Lokey and Freshfields are in discussion with additional bondholders to potentially join the group, sources added.

The company said significant declines in revenue due to store closures in connection with the Covid-19 pandemic has prompted a need to improve its capital and liquidity situation.

A call will be held at 2.30 p.m. BST for bondholders to discuss next steps, sources said.

Takko’s capital structure is below: