The column “René wants profitability”: Companies under pressure: vultures are already flying over Germany

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I would like to write something good about the economic situation in Germany, something that gives hope. But unfortunately the number of bad news is increasing.

Then I came across a disturbing article from the financial service Bloomberg. The text deals with the financial situation of companies in Germany. According to data analysis by Bloomberg experts, a whopping $13.6 billion in loans were at risk of default last month, 13 times more than in Italy. About 15 percent of companies are in difficulty; This proportion is not higher in any other Western European country, writes Bloomberg citing a study by the consulting firm Alvarez & Marsal.

The result: German companies now have to pay higher risk premiums for new loans than the European average. “Germany is really in trouble. All major manufacturing economies are slowing, but in Germany this is exacerbated by higher energy costs.”

The emergency arouses interest. Private equity firms see their opportunity to buy family businesses on the cheap and restructure them. The industry downturn means there is an “opportunity to make high-interest loans or buy companies that are quite leveraged and inject capital into them,” Victor Kholsa, founder and chief investment officer of Strategic Value Partners, said in an interview with Bloomberg Television. . “We can really see these possibilities.”

About the author Clemens Schömann-Finck

Clemens Schömann-Finck is a financial expert and is behind the YouTube channel “René wants profitability”. In his FOCUS Online column he highlights current issues related to the stock market and investing. He subscribe to his newsletter here for more financial information.

Direct lenders such as Ares Management Corp. and Blackstone Inc. have already opened new offices in Frankfurt and are proactively looking to make loans to German companies, including financing private equity acquisitions.

“Germany's days as an industrial superpower are numbered”

The article about the financial problems of the business sector fits into the gloomy picture that Bloomberg has been painting about Germany for weeks. “Germany's days as an industrial superpower are numbered,” is the title of a text that appeared a few days later. “The cornerstones of the German industrial apparatus have fallen like dominoes. The United States is moving away from Europe and trying to compete with its transatlantic allies for climate protection investments. China is no longer a voracious buyer of German industrial products and is increasingly becoming a competitor. The final blow for some heavy industry companies was the loss of supply of cheap natural gas from Russia,” he stated.

In addition to global imponderables, political paralysis in Berlin is exacerbating national problems such as crumbling infrastructure, an aging workforce and bureaucratic chaos. The education system, once a strength of Germany, is emblematic of the long-standing lack of investment in public tasks.

The power of these phrases should not be underestimated. Bloomberg is one of the most respected financial services in the world. There are Bloomberg terminals in all major banks and in all major financial departments. This means that these reports spread quickly. The swan song will leave its mark on decision makers.

But is all hope lost? I don't believe it. Especially those who operate in the stock market are familiar with the phenomenon of crash prophets with their gloomy statements. The great crisis is always imminent.

The problem: These prophets of doom continue with current events and ignore the fact that surprising turns of events can occur at any moment. “What will happen tomorrow we cannot know scientifically today, since it depends largely on knowledge and information that has not yet been created and, therefore, cannot be known today,” as the Spanish economist Jesús Huerta beautifully expresses it. de Soto. We are currently facing many gloomy scenarios for Germany.

But the same applies here: the future cannot be predicted. The debate over the level of corporate tax, for example, shows that with increasing pressure things can start to move.

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