Banks and bondholders have taken control of struggling clothing retailer Edcon‚ its chief executive said yesterday.
Taken private in a highly leveraged R25-billion buyout by Bain in 2007‚ Edcon has struggled to grow at a fast enough rate to pay down debt.
“We have been living beyond our means. Expenditure was more than our income‚” chief executive Bernie Brookes said.
The new owners of the company are Standard Bank‚ Barclays Africa Group‚ FirstRand‚ Standard Chartered and Investec.
Others are Franklin Templeton and Harvard Pension Fund. The retailer has been grappling with an over-leveraged capital structure for several years.
Brookes said Edcon had reached “a catastrophic situation in March” and had to choose between business rescue or not paying debt holders. – Reuters