Crisis, restructuring, insolvency, fresh start – On 1 July 2016, the Cologne local court resolved to terminate the insolvency proceedings against Germany’s Prime Standard listed DF Deutsche Forfait AG following the creditors’ approval of the insolvency plan.
Cologne, 6 September 2016 – IR.on assisted and advised the company in its investor relations and communication activities during the restructuring phase and the insolvency proceedings.
The agreed insolvency plan means that the company is completely deleveraged. The creditors will be satisfied through the successive collection of receivables from the existing portfolio of the trade finance company. In addition, a cash capital increase and a capital increase against contributions in kind provided DF Group with fresh equity in the amount of EUR 11.2 million.
The crisis began when the company was – through no fault – listed on the sanctions list of a department of the US Finance Ministry in February 2014. This brought the operations of DF Deutsche Forfait AG to a virtual standstill. The eight-month listing led to a sharp drop in equity capital, which required the comprehensive financial restructuring of the company. With the planned recapitalization failing in phase I (Nov. 2014 - Sep. 2015), the company continued its restructuring exercise in a “Schutzschirmverfahren” pursuant to section 270b of the German Insolvency Code. This three-month phase of creditor protection with debtor-in-possession status allowed the company to take advantage of the restructuring instruments provided under the German ESUG Act and to develop an insolvency plan which enabled DF Group to continue as a going concern with the consent of its creditors.
Apart from the website, more than 60 press releases, including 34 ad-hoc announcements, kept the stakeholders informed of the progress made in recapitalizing the company during the 20-month restructuring phase.
The main challenge for the crisis communication and the IR activities was to address the lack of information after the company was removed from the sanctions list in order to restore confidence in the company. The lack of information was due to the fact that the company was forced to restrict its external communication while the negotiations with the US authorities were underway. Another challenge was to make the company’s complex restructuring concept understandable and to secure the required majorities for the necessary capital measures and the creditors’ interest waiver at the Annual General Meeting and the bondholders’ meeting. In phase II (Oct. 2015 - July 2016), the stakeholders needed to be regularly informed of the extended restructuring possibilities under the “Schutzschirmverfahren” as well as of the state of the discussions with the creditors’ committee. Apart from the website, more than 60 press releases, including 34 ad-hoc announcements, kept the stakeholders informed of the progress made in recapitalizing the company during the 20-month restructuring phase.
Notwithstanding some setbacks during the crisis, DF Group was able to obtain the required approval for the financial restructuring from its creditors, which allowed the company to make a fresh start in what remains an exciting foreign trade financing market. This was achieved not only thanks to the ongoing and open dialogue with the stakeholders but also to the fact that the DF team was firmly convinced of the company’s ability to continue as a going concern.