Megha Mittal to buy luxury fashion house Escada

Megha Mittal will buy insolvent German luxury fashion house Escada for an undisclosed price, the company said on Thursday.

"Today the insolvency administrator of ESCADA AG signed a sale and transfer agreement with one of the Mittal Family Trusts," the company said in a statement late on Thursday after the preliminary creditors' committee approved the deal.

"The Board of Management and the new investor have agreed to cooperate on the basis of the business strategy launched in mid-2008 securing continuity of the operative business," Escada continued.

All key assets of Escada's operating business as well as shares in its subsidiaries will be transferred to Mittal's trust, excluding those that serve as guarantor for the Escada bond.

Escada, once one of the world's top fashion labels, filed for insolvency in August after years of diminishing sales took their toll and a broad restructuring plan failed to win approval from bondholders.

Mittal won the bidding war for Escada against Sven Ley, son of Escada founder Wolfgang Ley. He said on Tuesday he had teamed up with the former head of Gucci, Giacomo Santucci, and Italian investment group Borletti to mount a rescue bid.

Megha Mittal, the 33-year old daughter-in-law of ArcelorMittal chief executive Lakshmi Mittal, had also expressed an interest in Escada.