German retailer Praktiker meets for crunch talks on financing
FRANKFURT, July 10
FRANKFURT, July 10 (Reuters) - German DIY retailer Praktiker , struggling since a strategy of offering big discounts led to losses, is in talks to find financing to pay suppliers, several people close to the matter said.
Two people close to Praktiker's supervisory board said the company was still talking to one bank. Talks with current creditors over an injection of 30-35 million euros ($38-45 million) had ended without agreement, three people close to the negotiations said.
Praktiker, which runs 430 shops in nine countries, has been trying to improve its fortunes with store refurbishments after big discounts to entice customers led to losses. A cold, wet European spring compounded its difficulties.
"It's difficult. Very, very difficult," a supervisory board member said following a board meeting on Wednesday.
A spokesman for Praktiker declined to comment on the company's financial situation. He said that the board was meeting on Wednesday but declined to say which topics were being discussed.
Praktiker's management was prompted to seek new funding after a credit insurer withdrew coverage to some of its suppliers this week, according to two people close to the creditors.
Credit insurers protecting suppliers against losses if a company fails to pay its bills. The loss of cover could mean suppliers insisting on quicker or even upfront payment for goods.
One of Praktiker's biggest creditors is Commerzbank , which declined to comment on the matter. ($1 = 0.7821 euros) (Reporting by Alexander Huebner, Matthias Inverardi and Jonathan Gould; Writing by Victoria Bryan and Maria Sheahan; Editing by Matthew Tostevin)