Takko Fashion

Houlihan Lokey is pleased to announce the successful and fully consensual lender-led restructuring of Takko GmbH (Takko), which closed on August 10, 2023. The transaction comprises a holistic restructuring of Takko’s entire capital structure that saw creditors acquire the substantial majority of the pro forma equity through a debt-for-equity swap as well as the reinstatement or refinancing of €480 million of debt and €190 million of letters of credit and ancillary banking lines.

Takko is a discount fashion retailer that owns and operates almost 2,000 discount stores in 17 countries across Western, Central, and Eastern Europe, though predominantly in Germany. The company was founded in 1982, is headquartered in the vicinity of Münster, Germany, and, prior to this transaction, had been owned by Apax Partners since 2011.

Takko’s business model (predominantly focused on out-of-city retail stores with limited online presence) meant that it was particularly impacted by the COVID-19 pandemic and associated shutdown of retail stores. While the company was able to raise emergency liquidity financing, partly with the support of Apax (the “COVID facility”) and trade through the pandemic, it caused an already elevated leverage profile to become further stretched. In addition, macroeconomic factors such as supply chain disruptions, inflation, falling consumer real wages, and increasing interest rates further deepened the crisis as it came closer to its impending maturities in 2023.

Houlihan Lokey was retained as the exclusive financial advisor to an ad hoc group of noteholders holding interests in Takko’s €285 million secured fixed rate notes and €225 million secured floating rate notes to support them in addressing the impending maturities of the notes as well as the maturities under the company’s debt, letters of credit, and ancillary banking lines.

The fully consensual transaction completed in August 2023 and comprised creditors (the noteholders as well as lenders under the pari-passu COVID facility) acquiring a substantial majority of the pro forma reorganized equity through a €150 million equitization, the reinstatement of $400 million of debt ($300 million as a secured OpCo loan and $100m as a HoldCo strip), as well as the refinancing and extension of maturities to 2026 on €80 million of bank debt and c. €190 million of letters of credit and ancillary banking lines.