Jelmoli says spin-off plan progressing well

Swiss retailer Jelmoli said on Tuesday it has made 'significant progress' in implementing a strategic plan that will result in the group being split into separate listed real estate and investment firms. The strategic plan was drawn up following the collapse late last year of a EUR 2bn sale-and-leaseback of 88 department stores to an Israeli consortium due to the credit crunch.

Jelmoli instituted arbitration proceedings against the consortium and in April this year the retailer was embroiled in a battle on a second front when its majority shareholder, Pelham Investments, signalled it was considering launching a takeover bid.

The Swiss retail group said on Tuesday that Pelham has publicly expressed support in principle for the split-up plan. Furthermore, Jelmoli said it has obtained a positive tax ruling, confirming the tax-neutrality of the transaction while the internal reorganisation to facilitate the distribution of the investment company to shareholders is on track. Discussions with the Swiss Stock Exchange on the disclosure requirements are also well advanced, Jelmoli said.

Jelmoli's board plans to present the entire strategic plan to shareholders at an extraordinary meeting in the fourth quarter of 2008. The implementation of the plan in one package will be subject to a qualified majority of Jelmoli shareholders. This means that the majority shareholder and a substantial number of other shareholders will need to approve the plan at the meeting for it to be implemented.

'The board is convinced that the proposed strategic plan is in the best interest of the Company and all of its shareholders. The board has decided to put its recommendations to shareholders for their approval at one meeting in order to focus the debate on the entirety of the plan rather than on certain elements, or the mechanics of its implementation, chairman Christopher Chambers said in a statement.

Jelmoli also announced that Harald Pinger will step down as CEO and president of the executive committee of Jelmoli with immediate effect following the Annual General Meeting on 18 June 2008. He will remain on the board of directors and continues to support the strategic plan. The duties of the chief executive will be performed temporarily by the executive committee of the board of directors.