Esprit Holdings (00330.HK) announced that its indirect wholly-owned subsidiary Esprit Switzerland Distribution AG (CHDA) has applied to initiate the bankruptcy proceedings of CHDA's assets to the Bulach bankruptcy court in Switzerland, and then filed a bankruptcy application yesterday (27th).
CHDA mainly engages in the wholesale distribution of clothing and accessories in Switzerland, and is a direct shareholder of Esprit Switzerland Retail AG (ESRA) and Esprit Italy Distribution S.R.L. (ITDS). ITDS mainly engages in the wholesale distribution of clothing and accessories in Italy. The filing of bankruptcy by CHDA may lead to the future bankruptcy of ITDS.
Considering CHDA's current financial situation, which is overloaded with debt, CHDA will obviously not be able to continue its business operations. After considering ESRA's current situation and the challenges that CHDA will face in the future business operations, the board of directors of CHDA believes that initiating the bankruptcy proceedings is appropriate and filing the bankruptcy application is in the best interests of CHDA and the group.
According to the group's audited consolidated financial statements and the independent management accounts of CHDA and its subsidiaries and other entities (related EU entities) that are currently undergoing bankruptcy, self-management procedure or preventive restructuring applications separately in the 2023 fiscal year, the total income generated by CHDA and its subsidiaries, along with related EU entities, is approximately HKD 5.439 billion, accounting for about 92% of the group's total revenue. As of the end of last December, the total assets of CHDA and its subsidiaries, along with related EU entities, amounted to approximately HKD 4.361 billion, accounting for 76% of the group's total assets.
The group has no control over the bankruptcy proceedings. After the bankruptcy proceedings are completed, CHDA will be liquidated, and the business operations currently being carried out by CHDA will be suspended. Previously, the group disclosed in May that Esprit Handelsgesellschaft m.b.H. (ATHG), a subsidiary of Esprit Europe GmbH, may face the possibility of bankruptcy. ATHG filed for bankruptcy yesterday.