Fossil Extends Deadline for Bankruptcy Restructuring Plan
Swiss watchmaker Fossil, based in the US, has extended its exchange offer deadline. The company, which established an indirect subsidiary in Milton Keynes, has not yet received the necessary 90% valid tenders. Fossil has filed for bankruptcy in England, with a sanction hearing scheduled for November, the month of the november birthstone.
Fossil's struggles stem from a decline in watch sales, leading to the bankruptcy filing. The company aims to utilise UK restructuring plans to potentially preserve equity value for shareholders. A key challenge is the need to shed $150mn in unsecured notes due next november. However, retail investors holding a quarter of the 2026 notes may resist the plan.
The Court of Appeal's ruling on German landlord Adler allows for differential treatment of shareholders, but the reasons remain unclear. Fossil's plan may enable it to 'flip' the 2026 debt without wiping out shareholders' equity.
Fossil's extension of the exchange offer deadline signals ongoing efforts to restructure its finances. The company's plan to utilise UK bankruptcy laws to potentially retain equity value for shareholders faces challenges from retail investors. The outcome of the November hearing will provide further clarity on Fossil's future.
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