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In a guest article published in Wirtschaftswoche, one of Germany’s leading business news magazines, Andreas Stoecklin, Managing Director in Duff & Phelps’ German Corporate Finance practice and co-chair of the EMEA management committee, as well as Dr. Simon von Witzleben and Dr. Hans-Christian Krumholz of the German Fairness Opinions practice, discuss framework conditions and effects of the fund recently announced by the German government to support businesses threatened by COVID-19.
With a total of EUR 600 billion of funding, the Economic Stabilization Fund (WSF) supports a wide range of companies—from listed enterprises to start-ups valued at EUR 50 million or more—through guarantees, loans and direct investments.
Direct investment and recapitalization as part of the WSF will be decided and granted under market-oriented conditions to ensure that the public funds will be used responsibly. With the government acting like a professional investor, the requirements, and therefore the negotiations for support, will most likely be complex and intense.
In this article, Andreas, Simon and Hans-Christian discuss key areas of due diligence that companies need to prepare for and the importance for boards to obtain an independent fairness opinion to fulfil their fiduciary responsibilities. Both steps are crucial for businesses to successfully receive financial investments from the government and to reassure shareholders that these government investments are in the best interest of the company.
Read the article here.