* Praktiker says talks with creditors were unsuccessful
* Praktiker says company lacks liquidity, is heavily in debt
* Praktiker says board to review entities subject to
(Adds company statement)
FRANKFURT, July 10 German do-it-yourself
retailer Praktiker said on Wednesday its management
board was no longer sticking to the assumption that the group
could continue its businesses after financing talks with
creditors ended without agreement.
"The management board of Praktiker AG has denied the
positive continuation forecast for Praktiker AG and certain
entities within the Group," the company said in a statement late
Praktiker said it lacked liquidity and was heavily in debt,
which it said were grounds for insolvency under German law.
"The Management Board will carry out a review in relation to
the Group in order to determine the entities in relation to whom
insolvency petitions will have to be filed and will then publish
the results of this review as soon as possible," the company
It said negotiations on a further restructuring of its
finances were "unsuccessful" on Wednesday evening "because
certain creditor groups did not provide approval for such
The company said it needed an "alternative financing
solution" after the sale of its stake in Luxembourg-based unit
Batiself SA could not be completed by the buyer.
The expected proceeds from the sale were part of the
financing concept drawn up last year, it said.
Several people close to the matter told Reuters earlier on
Wednesday that Praktiker was in talks to find financing to pay
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
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 had declined earlier on Wednesday
to comment on the company's financial situation. He said 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
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
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, Jonathan
Gould and Marilyn Gerlach; Writing by Victoria Bryan and Maria
Sheahan; Editing by Matthew Tostevin, Toni Reinhold)