Reuters: Bankruptcy News: UPDATE 1-Critical Praktiker investors have plan for business

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UPDATE 1-Critical Praktiker investors have plan for business Jul 4th 2012, 13:31 Wed Jul 4, 2012 9:31am EDT * Fund manager de Krassny backers have majority at AGM * De Krassny says investors have alternate plan, financing * Praktiker warns of bankruptcy if own plan not adopted * Praktiker share down 8.7 pct (Recasts with de Krassny comments, adds quotes, detail, background) By Jan Schwartz HAMBURG, July 4 (Reuters) - Major investors in struggling German DIY chain Praktiker AG said they have a plan to carry on the business and financing to back it, as they battle with the company's management to stave off bankruptcy. Fund manager Isabella de Krassny, whose backers held a majority at Praktiker's annual shareholders' meeting on Wednesday, stepped up her opposition to the company's own rescue plan, to which management had said there was no alternative. "We demand the resignation at least of all the supervisory board members," de Krassny told the meeting. De Krassny said the investors in her camp, which include big shareholders Maseltov and Semper Constantia, have the management experience to lead the company and access to at least 55 million euros ($69.3 million) in financing. Praktiker had been seeking shareholder permission to raise up to 60 million euros in a capital increase and accept an 85 million loan from U.S. investor Anchorage. In exchange, Anchorage would gain options for 15 percent of Praktiker's stock, a plan that has angered shareholders. Before the meeting, Praktiker had published a letter to shareholders on its website, saying there was no other investor in sight, the financing concept was fair and warning that "the company otherwise faces immediate bankruptcy". The group was also planning to agree bank loans of up to 95 million euros. The 240 million euro package of measures compares with the company's market value of around 78 million euros. Praktiker, which runs stores under the Praktiker and Max Bahr brands, got into trouble after scrapping a popular "20 percent off everything" ploy l a st year. The decision, which former Chief Executive Wolfgang Werner took in a bid to improve profit margins, instead resulted in a slump in customer numbers and sent the group crashing to a yearly net loss of 554.7 million euros. Restructuring expert Thomas Fox, known in Germany for successfully turning around the Karstadt department store chain, was brought in, but unexpectedly left in May. Krassny, who earlier said she represented the holders of 16 percent of Praktiker's shares at the meeting, demanded Max Bahr as collateral for her alternative business plan. Praktiker said the holders of only 26.90 percent of its voting capital were present at the meeting. ($1 = 0.7933 euros) (Additional reporting by Joern Polz and Angelika Gruber; Writing by Victoria Bryan and Jonathan Gould; Editing by David Holmes) Link this Share this Digg this Email Reprints

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