FRANKFURT (Reuters) - A leading shareholder of insolvent German home improvement retailer Praktiker PRAG.DE is considering buying out banks in a move to save the company, Germany’s leading tabloid newspaper reported on Saturday.
“An insolvency is not the end. Together with other investors we are considering buying the loans held by banks,” Isabella de Krassny told Bild.
She and her husband Alain de Krassny together own about 15 percent of Germany’s No. 3 DIY chain, according to Thomson Reuters data.
Praktiker could return to profitability if costs were cut substantially, de Krassny told the paper. “Procurement expenses could be cut by 80 million euros ($104 million)annually with better contracts,” she said, adding administrative costs could easily be halved.
Despite filing for insolvency, Praktiker will carry on trading from all its stores pending a review to see if it can be restructured, its insolvency administrator said on Friday.
Praktiker, a household name in the country, filed for insolvency on Thursday after talks with creditors failed, triggering fears of heavy job losses.
The group has been weighed down by growing debts, which posted a year-on-year increase of more than a quarter to 535 million euros by the end of March. At the same time, its liquid funds shrank by almost 29 percent to 51.3 million euros.
Praktiker stores selling paints, tools and gardening products are a familiar sight in Germany’s out-of-town shopping centers. But years of under-investment had left the stores looking tired and made them vulnerable to competition from rivals with more up-to-date shops and service.
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Reporting by Arno Schuetze; Editing by Mark Trevelyan