LONDON (Alliance News) - Hightex Group PLC Monday started insolvency proceedings, after revealing that it wouldn't get any money from the likely sale of its German operating business out of Germany's equivalent of Chapter 11.
The company's Hightex GmbH operating business went into a self-administered creditors' plan after accusing its joint venture partner in Brazil of misappropriation of EUR3.3 million of funds. The venture partners had been working together on two 2014 World Cup stadia. The business was also hit by its failure to win any further stadia contracts, notably for the 2018 World Cup that's being held in Russia.
Last week, the Hightex GmbH creditors' committee unanimously approved in principle an offer for the business made by an Austrian company. The plan for the disposal of the business will be submitted to the local court in Rosenheim, Bavaria, and, once confirmed by the court, the decision will be mandatory for all creditors.
"The directors of Hightex Group plc regret that as a result of the information regarding the offer received on February 27th it is now clear that no funds from Hightex GmbH will flow to Hightex Group plc, which is therefore in a critical financial situation. The directors have concluded that an insolvency procedure should be commenced immediately and details will be confirmed as soon as practicable," the parent company said Monday.
Hightex Group shares were suspended on Friday at the request of the company pending an update on the German operating unit.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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