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Duke Street Austrian buyout fails

The firm is reported to be looking at a £50m loss after one of its portfolio companies filed for bankruptcy this week.

Duke Street Capital is likely to incur a loss of £50m after an investment in Austria turned sour, according to the Daily Telegraph newspaper.

Steiner Industries, a furniture and packaging business in which Duke Street holds a two-third stake, filed for bankruptcy earlier this week with debts of £200m.

Duke Street invested in Steiner in 1998 and 1999, buying equity in the company off the founding Steiner family, which still holds a one third stake. Debt financing was provided by Merrill Lynch.

Last year Steiner’s auditors had discovered accounting irregularities which ultimately led to the company’s downfall.

Duke Street has been accused by Albert Steiner to have pushed the business into bankruptcy to be able to buy the stake that it doesn’t already own at a lower price, the Daily Telegraph said. Duke Street has rejected the claim.

No one at the firm’s London headquarters was available for comment today. Alex Cooper Evans, a director at Duke Street, told the Daily Telegraph that the firm was “reluctant to say anything formally until events become more concrete.”