Defects of SMCP parents on obligations; Operations are safe, according to the company
By Joshua Kirby
SMCP SAS said Thursday it had been notified of a credit default by its controlling shareholder, but stressed that the situation did not endanger the company.
The French fashion group said bond trustee GLAS had informed it of the failure of European TopSoho, a subsidiary of struggling Chinese clothing conglomerate Shandong Ruyi Technology Group, to buy back bonds from a worth 250 million euros ($ 292.2 million) before their due date Tuesday. The Luxembourg holding company has until September 30 to remedy the failure, said SMCP.
The bonds, exchangeable for SMCP shares, are subscribed for by shares representing 37% of the group’s capital, according to SMCP. European TopSoho owns around 53% of the group’s shares.
The development does not jeopardize the funding and operations of SMCP, the company said.
Last week, shareholders represented by the business ethics group Governance in Action wrote to the company expressing their concerns about what would happen if the controlling shareholder failed.
“The situation is alarming for the future of SMCP, its minority shareholders, its employees and all other stakeholders,” said Fabrice Remon of GeA in the letter, which was also sent to the French Authority for capital markets.
European TopSoho and Shandong Ruyi did not respond to requests for comment.
Write to Joshua Kirby at [email protected]; @joshualeokirby
(END) Dow Jones Newswires