(Bloomberg) -- Lenders to Berlin-based SellerX canceled a plan to auction off the brand aggregator on Tuesday, opting instead to continue debt negotiations with shareholders of the struggling company.
SellerX confirmed that the auction, initiated by BlackRock Inc. and Victory Park Capital Advisors LLC last month, has been canceled. “We welcome the cancellation of the auction and see this as a sign that discussions between our shareholders and our lenders on simplifying and strengthening our capital structure are progressing well,” a spokesperson for the aggregator said in an emailed statement.
In Germany, such auctions enable lenders to take control of shares pledged under loan agreements. During debt overhauls, creditors can use these enforcement measures to nudge other stakeholders to come to the negotiating table.
SellerX, which was once valued at over $1 billion, has been struggling under its debt burden due to a slowdown in online sales. The company is backed by private equity firms including L Catterton.
Victory Park declined to comment. Blackrock and L Catterton didn’t immediately respond to requests for comment.
Brand aggregators buy up firms that sell products via online platforms. The companies raked in billions in investments during the pandemic surge in e-commerce, but there’s been a wave of bankruptcies and consolidation across the sector since countries wound down their Covid-restrictions.
BlackRock and Victory Park Capital extended a $400 million loan to SellerX in 2021, which was increased last year when the company acquired fellow aggregator Elevate Brands.
BlackRock in the second-quarter moved the status of the loan to non-accrual status, which means the borrower stopped making payments.
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