Investors in Scholz Holding GmbH bonds will not receive an interest payment on March 8. The due payment has been deferred until May 31, 2016.
GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: Investors in Scholz Holding GmbH bonds were initially supposed to be paid around 15.5 million euros in interest on March 8 by the financially stricken company. In consultation with the trustee, the interest payment has now been deferred until May 31, 2016. The deferral has been approved by the Handelsgericht Wien (Commercial Court of Vienna).
By its own account, Scholz Holding GmbH wants to use the time to continue restructuring talks with potential investors. However, there is not much time left. On May 31, interest payments amounting to approx. 15.5 million euros will fall due. The SME bond issued under Austrian law with an issue volume of about 182.5 million euros is meant to be repaid in 2017. It remains to be seen whether the company will be able to achieve this or whether the investors shall have to make a much larger contribution for the purposes of recapitalizing the company instead of simply deferring the interest for a few weeks.
Scholz Holding GmbH’s economic situation remains precarious and it is not yet certain whether the talks with the investors will have the desired outcome. With the bond price having collapsed and a sale being hardly worthwhile, investors should continue to anticipate losses. The investors can have someone review their legal options in order to be prepared for all eventualities. To this end, they can turn to a lawyer who is competent in the fields of banking law and capital markets law.
He will be able to assess, among other things, whether it is possible to call in the bond prior to its maturity or, as the case may be, assert claims for damages. These may have arisen e.g. as a result of errors featured in a prospectus. Errors of this kind can encompass information in issue prospectuses that was incomplete or inaccurate. It is equally possible for claims to result from erroneous investment advice. Investors ought to have been comprehensively informed about the risks associated with the investment as part of a proper consultation.
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