Holzmann Saved With Help From German Chancellor

Chancellor Gerhard Schroeder successfully brokered a deal between troubled construction firm Philipp Holzmann and its creditors.

Schroeder emerged from a meeting late Wednesday and announced to cheering employees outside that their jobs at the financially strapped company had been secured.

Following more than two hours of talks, Schroeder said the creditors, which include Deutsche Bank, had agreed on a restructuring plan for Holzmann. He said the government would ensure that credit for Holzmann would be increased about $78.3 million. In addition, a surety of $52 million would be made available.

No other details were released.

The crowd of several hundred employees blew whistles and shouted “Gerhard, Gerhard,” in celebration of the success of the last desperate attempt to save the jobs of 17,000 domestic workers and those at tens of thousands of suppliers.

Before going into the talks, Schroeder said: “I came here to get the banks to be responsible. To be responsible not to let a company that I consider salvageable break up.”

Holzmann, Germany’s second-largest construction company, filed for bankruptcy Tuesday, but said it would cancel it if Schroeder’s efforts were successful.

The firm shocked markets a week ago by revealing potential losses of $1.3 billion because of what it termed mismanagement by former executives.