Business News

Merkur Takeover Vehicle Goes into Receivership

Ljubljana, 03 June (STA) - The Ljubljana District Court launched on Friday receivership proceedings for Merfin, the acquisition vehicle in the ill-fated management takeover of troubled hardware retailer Merkur. Creditors need to register their claims by 5 September.

Receivership for Merfin, which is owned by Merkur managers, was already proposed in late February by HTC Dva, which is thought to have been set up to provide financing to Merfin and has around EUR 182.5m in claims to Merfin.

The launch of receivership was delayed by Merfin filing for debt restructuring on 1 April, but was taken up again by the court as Merfin failed to supplement its debt restructuring proposal.

Merfin was offering to pay back only 2.07% of the EUR 331m in claims to creditors, arguing no assets were left as all had been taken away by banks.

HTC Dva as the biggest creditor is also in receivership. It was reportedly used to create a chain through which Merkur was indirectly paying for the loans taken out by the managers for the takeover.

The takeover, which failed in mid-2010 as banks recalled their loans to Merfin after the crisis seriously eroded the share value of Merkur - which had been staked to the banks as collateral - is the subject of a police investigation.

The investigation was launched after an audit of Merkur's books last year found irregularities worth EUR 130m, which are thought to be related to transactions between Merkur and HTC Dva, and HTC Dva and Merfin.

As a result of write-downs stemming from the findings of the audit, Merkur was forced to downgrade its loss for 2009 by EUR 137m to EUR 148m and subsequently declare insolvency.

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