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Shareholder revolt threatens Kartstadt rescue

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Shareholder revolt threatens Kartstadt rescue

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Germany’s biggest department stores operator, KarstadtQuelle is in trouble with its proposed sale of new shares to raise 500 million euros.

At least one major shareholder is resisting the plan to raise capital, but the company faces possible bankruptcy if it cannot raise the cash. The company is in the middle of a vast restructuring programme, selling assets and sacking 5500 of its 100 000 strong workforce. One of those asset disposals was finalised today, with Starbuck’s buying out Karstadt’s majority shareholding in its coffeshop chain joint venture for an undisclosed sum. The objections to the cash call have to be resolved by Friday, or the prospectus for the rescue rights issue will not be published on time. It would also scupper a one and three quarter billion euro credit line organised by 16 banks to tide the company over.