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Heuking advises ETERNA on reorganization

With the approval of its creditors, ETERNA Mode Holding GmbH has successfully paved the way for future sustainable financing. The creditors approved a reorganization plan proposed by the company to implement reorganization proceedings under the Corporate Stabilization and Corporate Reorganization Act. The reorganization plan will be implemented following the confirmation by the competent reorganization court, which the company will now apply for without delay. ETERNA Mode GmbH’s operational business will not be affected by the holding company’s reorganization. A team led by Dr. Thorsten Kuthe advised ETERNA Mode Holding GmbH on issues relating to capital market law associated with the reorganization. This included, in particular, a prior meeting of the creditors of the 2017/2024 bond, at which a joint representative was appointed to represent the bondholders’ rights in the reorganization proceedings under the Corporate Stabilization and Corporate Reorganization Act.
The reorganization concept provides for a debt haircut on the unsecured 2017/2024 bond, according to which the bondholders’ claims and the outstanding interest will be serviced at a rate of 12.5% on the nominal value. This will be paid entirely from shareholder funds. In addition, the majority shareholder will fully waive its claims from shareholder loans of EUR 32.3 million and provide additional equity, which will be used to finance the operating business in addition to the payment of the quota.
Headquartered in Passau, ETERNA Mode Holding GmbH is a leading manufacturer of men’s shirts and women’s blouses. In 2020, ETERNA sold about 2.2 million shirts and half a million blouses. It also sold a range of face masks in addition to ties and accessories. ETERNA is represented at some 3,600 points of sale in more than 40 countries. As a vertical supplier, ETERNA also maintains its own distribution channels in the form of own stores and online retailing. ETERNA products are currently sold in more than 53 retail stores and 14 franchise stores. Despite an essentially successful operational crisis management, which was also explicitly confirmed by the independent IDW S6 expert opinion, ETERNA had transferred from a healthy and promising corporate situation with profitable growth to this difficult phase as a result of the COVID-19 pandemic.
The team led by Heuking partner Kuthe regularly advises on bond reorganizations, in particular through creditors’ meetings.

Counsel to ETERNA Mode Holding GmbH
Heuking Kühn Lüer Wojtek:

Dr. Thorsten Kuthe (Lead, Capital Markets), Cologne
Christopher Goertz,
Meike Dresler-Lenz (both Capital Markets), both Cologne
Dr. Anne de Boer, LL.M. (Capital Markets), Stuttgart

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