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Business

Holzmann Admits 2001 Loss Was Higher Than Expected

Ailing construction group Philip Holzmann said that its final 2001 balance sheet will show higher losses than anticipated, but an aid package is likely on the way.

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The company hasn't been able to build on much success in recent years

Ailing construction group Philip Holzmann AG conceded Thursday that its losses incurred in 2001 were higher than first anticipated.

The exact figure has not yet been determined because the group is still in the process of drawing up the final balance sheet. Handelsblatt's Thursday edition reported that Holzmann is set to book a loss of nearly 200 million euro.

The group originally said it expected the loss to remain unchanged from 2000, at 80 million euro. Shares in Holzmann slumped 10 percent on the group's statement, but it managed to recover slightly towards the end of the session to close down 3.78 percent at 7.89 euros.

The response among Holzmann's creditors was cautious. People close to the banks said that there was still insufficient information on the group's financial situation. Although a meeting by the creditors, scheduled for Friday, would be difficult, it was likely that another aid package would be agreed.

"It's time to meet the challenge head on," one banker said.

A spokeswoman for the German government said Thursday that it did not see any need to take action in connection with Holzmann. Two years ago, the group escaped bankruptcy only after a last-minute intervention by Chancellor Gerhard Schröder.

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