Holzmann Ends Insolvency Filing in Wake of Rescue
Philipp Holzmann retracted its insolvency filing Thursday after the government and banks reached an agreement to save the troubled construction firm.
The government’s offer to help the company through the crisis may be enough to push some creditors to join the rescue plan, people involved with the deal said Thursday.
The company had filed for bankruptcy court protection Tuesday after two rounds of rescue talks with banks failed. Chancellor Gerhard Schroeder stepped in to personally mediate talks Wednesday--hours later proclaiming to cheering crowds of construction workers that an agreement had been reached.
On Thursday, Holzmann officials withdraw the insolvency filing and said the deal placed the firm on a “healthy foundation.”
“We have an excellent outlook for the future,” Holzmann Chairman Heinrich Binder told N-TV television.
Carl von Boehm-Bezing, a Deutsche Bank board member who is also chairman of Holzmann’s supervisory board, said the earlier rescue talks had failed because there was a $314.1-million hole in the rescue package.
The government’s involvement convinced some holdouts to take part in the plan, he said.
The rescue plan will mean about 3,000 workers will lose their jobs out of 17,000 employees in Germany, the chairman of Holzmann’s works council, Juergen Mahneke, told German radio. However, he said five divisions of the firm will be sold, meaning that 2,000 of those laid off would get work from new owners.
Holzmann’s restructuring and rescue deal with creditors will also involve payroll cuts and Holzmann will reduce its number of business units in Germany, Binder said.
As part of the plan, Holzmann will sell nearly all the real estate it owns in Germany, worth $523.5 million, Binder said at a news conference, adding that sales negotiations have already started.
Meanwhile, the European Union Commission said Thursday that it has requested information about the bailout plan the German government is offering. Under EU rules, rescue aid can be granted only in the form of a short-term loan or as a guarantee.
Schroeder said Thursday that he expects the government’s aid offer for Holzmann to be approved by the commission.
Holzmann, Germany’s second-largest construction company, shocked markets last week by revealing potential losses of $1.3 billion because of what it termed mismanagement by former executives.
