Andreas Stoecklin, Managing Director in Duff & Phelps’ Corporate Finance practice and co-chair of the EMEA management committee, was recently featured in Börsen-Zeitung, discussing German government funding to support businesses threatened by COVID-19, the complexities of funding prerequisites and framework conditions, and the importance of a fairness opinion in this context.

Andreas commented: “The requirement of the German government to invest ‘in line with market conditions,’ combined with many corporates lack of additional financing options, represents a special situation for equity capital valuation. It can be assumed that this will lead to intensive negotiations between the state and a company’s board.”

The management and supervisory boards will have to make existential decisions that are going to be subject to intense external scrutiny. In pursuing the best interests of shareholders, boards must deliberate on these complex corporate transactions in sub-optimal circumstances.

Andreas continued: Fairness opinions are a predestined instrument in these situations to support the company’s board with an “independent assessment” of the financial adequacy – for example in special situations where there is no market clearing mechanism (e.g. orderly transaction process) as well as where subsequent critical reviews by third parties are expected.

Börsen-Zeitung subscribers can read the article here.

To view the article in German, click here.

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