Noerr LLP: European Restructuring Conference of the law firm Noerr - Crisis in State Finances is a major challenge for Corporate Financing
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Noerr LLP: European Restructuring Conference of the law firm Noerr -
Crisis in State Finances is a major challenge for Corporate Financing
DGAP-Media / 04.05.2012 / 14:53
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European Restructuring Conference of the law firm Noerr - Crisis in State
Finances is a major challenge for Corporate Financing
Frankfurt, 4 May 2012.
The European sovereign debt crisis will cause the number of corporate
restructurings and insolvencies to considerably increase in the future.
This is the conclusion drawn today by many participants in the European
Restructuring Day in Frankfurt, to which the international law firm Noerr
invited restructuring experts, bankers, company representatives and
investors from all over Europe. They discussed the effects of and solutions
to the sovereign debt crisis and the intensified challenges to corporate
financing inter alia with Steffen Kampeter, Parliamentary Secretary of
State in the Federal Ministry of Finance, who emphasised the significance
of the consolidation policy in Europe. High-ranking experts such as Dr.
Panos Protopsaltis, head of the Greek Hellenic Republic Assets Development
Fund (HRADF) formed in 2011 due to the crisis, reported on restructuring
efforts in the crisis states.
'The massive sovereign debt in Europe is already a considerable burden on
the real economy, as the current sales reductions of many manufacturers
particularly in southern Europe show. In addition, corporate financing in
the coming years is rendered more difficult due to the considerable burdens
on bank balance sheets', said Prof. Dr. Christian Pleister, organiser of
the conference and Noerr partner. This is a problematic starting situation
in view of the enormous refinancing requirement: 'In the coming four years,
European companies are faced with expiring credit lines totalling 550
billion Euro', quoting current market studies. Pleister: 'The write-offs
due to the sovereign debt crisis in combination with the intensified equity
capital regulations of Basel III make it very questionable whether the
banks alone can cope with this financing mountain.' In view of the weakness
and volatility of the capital markets, raising equity capital is also
difficult. In addition, investors are more cautious in regard to company
bonds.
Against this background, Steffen Kampeter warned against deviating from the
path of consolidation of state finances in Europe: 'The debt-financed
economic stimulus programme again demanded would worsen the situation
further'. Growth impulses are important but above all through structural
reforms. 'Structural reforms are indispensable for improving
competitiveness which is ultimately a condition for growth', said Kampeter.
Restructuring is required, in the opinion of restructuring expert Pleister,
above all in companies the business model of which is placed in question by
increasing digitalisation and the growth of the Internet, for example the
printing industry including printing machinery manufacturers, stationary
traders and classical media companies. In addition, there will still be
significant market shake-outs after the stormy growth of recent years in
the renewable energy industry, as a panel with the Solar-Millenium
insolvency administrator Volker Böhm, the bio-energy entrepreneur Felix
Hess (NAWARO) and the former Q-Cells-CRO Dr. Walter Bickel declared.
Whether German insolvency law, significantly amended only two months ago,
can compete with the British 'Scheme of Arrangement' was also the subject
of a panel discussion. While the amendment was highly praised, the lack of
statutory regulation of third party security was criticised. This is said
to lead to restructuring of group financing by an insolvency plan of the
group parent, in which subsidiaries could usually help, being only possible
with the unanimous agreement of all creditors. This is damaging to Germany
as a restructuring jurisdiction and appears to make a Scheme of Arrangement
under English law more attractive. Pleister: 'In order to come level with
the Scheme of Arrangement, a similar provision should be included in the
still pending amendment of consumer insolvency.'
The success of the ESUG depends above all on whether the new opportunities
are also availed of in practice. The courts bear great responsibility: 'It
would be very damaging if, in alleged justice in an individual case,
judgments trailed after the intention of the legislature, as was the case
in the recent judgments on the application of the Bonds Act', said
Pleister.
Noerr is a leading European commercial law firm - with more than 470
professionals, five offices in Germany, seven in Central and Eastern
Europe, one in London, one in Alicante (Spain) and a representative office
in New York.
The Noerr Corporate Refinancing, Restructuring&Rescue Group consists of
specialists for refinancing, restructuring, and Distressed M&A and advises
listed companies, medium-sized companies, investors, banks and insolvency
administrators on restructuring and company rescue. Since 2009, the Group
has rescued 30 companies or company divisions from crisis and insolvency.
The Corporate Refinancing, Restructuring&Rescue Group is led by Prof. Dr.
Christian Pleister, one of the leading European restructuring experts.
End of Media Release
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