Debt-burdened Hooker Corp., an Australian property group which owns the exclusive Bonwit Teller department stores in the United States, began liquidating today as banks pressed the company for overdue payments.
Hooker said in a statement that it had no choice but to go into the initial stages of forced asset sales after a task force of more than 40 banks Tuesday abruptly ended an agreement on a four-month debt repayment moratorium.
The moratorium, agreed to only two weeks ago, was aimed at giving Hooker time to sell off assets to reduce its total debt of $1.4 billion.
Hooker has been brought down by near-record interest rates and a cooling property market in Australia, as well as an aggressive and expensive foray into U.S. retailing and property since Romanian-born developer George Herscu gained control of the group in 1985.
Hooker became one of the best known Australian companies in the United States under Herscu, sweeping up control of retailers such as Bonwit Teller, Parisian Inc., Merksamer Jewelers, B. Altman & Co. and Sakowitz department stores.
It also became heavily involved in U.S. real estate and built three shopping malls, now up for sale.
Herscu poured more than $1 billion into the United States where Hooker's problems first came to light earlier this year with suppliers complaining to the media about slow payments.
The bank task force did not say why they cut Hooker off, but banking sources said it was because Herscu refused to relinquish control to let the lenders recover their loans by an orderly sale of assets.
Hooker shares more than halved to 13 cents in early stock exchange trading today from Tuesday's close of 28 cents before bargain hunters pushed them up to close at 19 cents.
They will be virtually worthless Thursday if the Australian Stock Exchange follows its normal course of suspending trading in the shares of a company in liquidation.