Superdry plans emergency sale process if creditors block rescue plan | Business News

Superdry is preparing to undertake a four-week emergency sale process if creditors block its founder’s plans to inject up to £10m of his own money into the fashion chain in a bid to avoid insolvency.

Sky News has learned that the accelerated mergers and acquisitions process would be launched if a restructuring plan is not approved by creditors in the coming weeks.

Under the proposed survival plan, Julian Dunkerton would fork out £8 million in an open offer available to other shareholders or £10 million in a placement that would only be accessible to him.

The share sale would precede Superdry’s delisting from the London Stock Exchange.

The restructuring plan would have to be approved by creditors, including owners, in the coming weeks.

According to a document distributed to creditors in recent days and seen by Sky News, the rejection of the restructuring plan would be followed by a four-week Superdry sale process, with the likely outcome of a pre-pack administration agreement.

Sources said Dunkerton’s willingness to inject such a substantial portion of his fortune into the company reflected his confidence in the company’s recovery prospects.

Superdry shares have fallen to a series of record lows in recent months amid difficult negotiations and a failed sale process.

Last month, Sky News revealed that M&G, the asset manager that owns Superdry’s central London flagship store, was considering a challenge to its rescue plan.

M&G is believed to have been alarmed by its lack of participation in a mechanism that would allow creditors to benefit from any future recovery in the retailer’s performance.

The restructuring plan will not entail immediate store closures, but will impose considerable rent cuts on the owners of dozens of Superdry stores.

Sources said the company also plans to exit several foreign markets, including the US.

On Tuesday morning, the company’s shares were trading at around 6.7p, giving the debt-laden company a market capitalization of less than £7m.

It recently agreed an increase in debt capacity with Hilco Capital, one of its existing creditors, although it also owes tens of millions of pounds to Bantry Bay.

Dunkerton, who returned to the company in 2019 after being fired, holds just under 30% of the shares.

In recent months, Superdry has raised money by selling its brand in regions including India and Asia-Pacific.

Superdry declined to comment.