Praktiker Bau und Heimwerkermaerkte AG : Praktiker AG and eight operating companies file for insolvency

Hamburg / Kirkel - 11 July 2013. Today, Praktiker AG filed an application for initiating insolvency proceedings with the Local Court in Hamburg. This move had become necessary after negotiations about an initially promising financing scheme for the further restructuring had failed and, shortly before that, also the planned disposal of shares in the Luxembourg-based subsidiary Bâtiself S.A. could not be finalised on the grounds of lacking board approval. In addition to Praktiker AG, the application for insolvency proceedings will cover eight operating subsidiaries in Germany. Max Bahr with its presently 132 stores and international business are not affected by this move. The Praktiker and extra-BAU+HOBBY stores are to continue operations in the framework of preliminary insolvency proceedings.

The Praktiker Group had already embarked on a strict restructuring course in May 2012 which basically consisted in converting a major part of the Praktiker DIY stores to the more upmarket and profitable brand Max Bahr. The new concept had already began to establish itself in the market. By the end of March 2013 the company had converted 54 stores. Since their conversion, the new Max-Bahr stores have been generating significantly higher gross profits.

However, the unprecedented long winter season, a long spell of poor weather and the related massive slump in the DIY sector overshadowed the positive effects from the realignment of the business model in Germany in the first quarter 2013. As a consequence, the Group found itself in a difficult liquidity situation that did not improve in the season-wise crucial second quarter. The company managed to cope with this situation until the end of June by making substantial efforts, e.g. by agreeing extended payment terms with suppliers, releasing of hedging amounts, and divestments.

Unfortunately, it was not possible to find a sound follow-up financing. In this context, we did not succeed in divesting the Praktiker shares in the Luxembourg-based subsidiary bâtiself on schedule. Although the Management Board had negotiated a financing agreement with British and Austrian investors, this could not be finalised on the grounds of opposition from key creditor groups. Hence the basis for a positive going concern forecast no longer existed.

The Company therefore had to file an application for initiating insolvency proceedings with the Local Court Hamburg on Thursday, 11 July 2013.

The following group companies with registered office in Hamburg - in addition to Praktiker AG - filed an application for initiating insolvency proceedings: Baumarkt Praktiker Deutschland GmbH, Baumarkt Praktiker DIY GmbH, Baumarkt Praktiker GmbH, Baumarkt Praktiker Online GmbH, Baumarkt Max Bahr Praktiker Einkaufs GmbH, Baumarkt Praktiker Warenhandelsgesellschaft mbH, Baumarkt Praktiker Vierte GmbH, Baumarkt Praktiker Services GmbH, Hamburg.