Insolvent German bookseller Weltbild finds new investor
AUGSBURG, Germany, July 16
AUGSBURG, Germany, July 16 (Reuters) - The administrator of insolvent German bookseller Weltbild said on Wednesday he had broken off talks with investor Paragon Partners and agreed to do a deal with restructuring specialist Droege International Group instead.
Droege will participate in a 20 million euro ($27.1 million) capital increase at Weltbild and in return receive a 60 percent stake in the group, administrator Arndt Geiwitz said. It will also give Weltbild an unspecified loan.
Geiwitz, who said no agreement on the future of Weltbild could be reached with Munich investment group Paragon, will hold the remaining 40 percent on behalf of Weltbild's creditors.
Weltbild, owned by the Roman Catholic Church, filed for insolvency early this year after failing to keep up with competition from internet-based rivals such as Amazon.com and to obtain new financing.
Geiwitz has said more than 50 of the company's 220 stores were to be shut, and a third of its 3,000 jobs would have to go.
"Restructuring itself is not yet complete," he said on Wednesday.
The owners of Weltbild - 12 Catholic dioceses, the Association of German Dioceses and the church's soldiers' welfare organisation - have fought for years over their strategy for the company.
In late 2011, they even decided to prepare a sale of the business after accusations that Weltbild was making profits from selling erotic books, but no deal materialised.
Weltbild in 2012 generated sales of almost 1.6 billion euros with mail-order sales of books and household items. ($1 = 0.7390 Euros) (Reporting by Joern Poltz; writing by Maria Sheahan; editing by Tom Pfeiffer)