ESCADA AG

euro adhoc: ESCADA AG
Quarterly or Semiannual Financial Statements
Investor HMD Partners to invest EUR45 MM in ESCADA - Business Trends below Plan (E)

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Aschheim/Munich, 27 June 2003 - ESCADA AG and US private equity firm HMD Partners have entered into an agreement pursuant to which HMD will invest EUR45 MM in ESCADA AG via a cash capital increase, through the acquisition of ESCADA AG’s treasury stock and the subscription of a convertible bond at a price of EUR10 per share. This transaction will significantly strengthen ESCADA Group’s equity base. HMD will assume up to 29% of ESCADA AG’s increased share capital. HMD has entered into a share lock-up agreement in which the shares may not be sold prior to 2006. The capital increase facilitating the transaction is to be agreed at an extraordinary shareholders’ meeting on August 19, 2003. Furthermore, the investment is conditional upon the refinancing of the bank indebtedness of ESCADA AG. The result of these negotiations is expected to be announced shortly.

ESCADA Group’s business trend in the first half of 2002/2003 (1.11 - 30.4) was impacted stronger than foreseen by the consequences of the Iraq war on the worldwide consumer climate for luxury goods. In addition, the lung disease SARS harmed business in Asia, where ESCADA is market leader in the fashion industry. As a result, sales and profit remained below the planned amounts. Group sales for the first six months were EUR306.6 MM (previous year: EUR410.5 MM). Adjusted for deconsolidation effects (Beauté, Kemper/Féraud), sales decreased by 13%. Thereof, the translation of local currencies into the reinforced Euro accounted for approx. 5%. Profit before interest and taxes (EBIT) was minus EUR4 MM (previous year: EUR18.3 MM). After taxes, the interim net loss amounts to EUR7.3 MM (previous year: profit of EUR6.3 MM). Due to the multitude of negative external effects, the increase of Group EBIT planned for the fiscal year 2002/2003 is not reachable. Because of the substantial market uncertainties, ESCADA refrains from a precise profit forecast. However, Management still considers a positive EBIT as feasible. Management views the distinct increase in pre-orders for the spring/summer collection 2003/2004 in all ESCADA lines as a sign for a trend reversal.

end of announcement            euro adhoc 27.06.2003
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Further inquiry note: Viona Brandt Tel.: +49 (0)89 9944 1336 E-Mail: viona.brandt@de.escada.com

Branche: Clothing
ISIN:      DE0005692107
WKN:        569210
Index:    CDAX, Classic All Share, Prime All Share, Prime Standard, SDAX
Börsen:  Berliner Wertpapierbörse / official dealing
              Bayerische Börse / official dealing
              Frankfurter Wertpapierbörse / official dealing
              Bremer Wertpapierbörse (BWB) / regulated dealing
              Hamburger Wertpapierbörse / free trade
              Börse Düsseldorf / free trade
              Baden-Württembergische Wertpapierbörse / free trade



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