SMCP Parent Defaults on Bonds; Operations Safe, Company Says
September 23 2021 - 3:07AM
Dow Jones News
By Joshua Kirby
SMCP SAS said Thursday that it has been notified of a credit
default by its controlling shareholder, but stressed that the
situation doesn't put the company at risk.
The French fashion group said bond trustee GLAS had notified it
of a failure by European TopSoho, a subsidiary of struggling
Chinese apparel conglomerate Shandong Ruyi Technology Group, to
redeem bonds worth 250 million euros ($292.2 million) by their
maturity date on Tuesday. The Luxembourg-based holding company has
until Sept. 30 to remedy the default, SMCP said.
The bonds, which are exchangeable into SMCP shares, are
underwritten by shares representing 37% of the group's share
capital, according to SMCP. European TopSoho holds around 53% of
the group's shares.
The development doesn't put into question SMCP's financing and
operations, the company said.
Last week, shareholders represented by business-ethics group
Gouvernance en Action wrote to the company setting out their
concerns over what would happen in the case of such a default by
the controlling shareholder.
"The situation is alarming for the future of SMCP, its minority
shareholders, its employees and all other stakeholders," GeA's
Fabrice Remon said in the letter, which was also sent to the French
capital-markets authority.
European TopSoho and Shandong Ruyi did not respond to requests
for comment.
Write to Joshua Kirby at joshua.kirby@wsj.com;
@joshualeokirby
(END) Dow Jones Newswires
September 23, 2021 02:52 ET (06:52 GMT)
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