Sample Transactions
Transaction in a difficult environment
Project name |
Authority |
Client |
Banks |
Duration |
6 months |
Topic |
Moderation |
Volume |
EUR 20 million |
Starting situation: Owner experiencing difficulties due to growing cash flow problems resulting from the Management of his portfolio of office buildings. Initially very successful private ownership consortium in development and investment, but in the end phase, however, main owner already under OE and can no longer be encouraged to cooperate with the lending bank. Consequently threatened insolvency, which would have caused a significant need for value adjustment and involved costs and time for the bank, in order to protect itself from the threatened loss of value to the commitment.
One of the co-investors, who himself used to work for a bank, took all steps to prevent a termination of the loan by the bank, resulting in insolvency. The conditions were therefore difficult, the investors were involved in other similar cases with further credit institutions at the same time.
Task: Establish trust in the owners and – under these difficult conditions – develop a mutually beneficial means of prompt sale in order to limit further decreases in market value and liquidity.
Solution: Search for institutional investor with the willingness, tolerance and understanding for drawn out negotiations between the seller and the purchaser, its bank must not take on the role of a managing director.
Following a thorough investigation of the contractual ties, rights and obligations, as well as the owner’s cash flow, the conditions were able to be established under which a new solution approach for a transaction would be realisable. The focus was on weighing up the insolvency costs and a condition for terminating the loans which was acceptable to both parties.
The communication barrier was able to be broken down through moderation and mediation by a Senior Partner from Brüggemann GmbH, the solution was developed amicably, a purchase offer from an international institutional investor drawn up, and the property’s holding company protected from insolvency. As a result, the bank was able to cancel its provision for a significant value adjustment of its loan again (sum in the tens of millions).