The construction group, which just escaped bankruptcy two years ago, will open talks with potential buyers early in 2002; but industry insiders don't see it finding any takers.
Construction business still in a bad way
Construction group Philipp Holzmann said Wednesday it plans to open talks with potential partners or buyers early in the new year, but it added that it's still not ruling out the possibility of retaining its independence.
In an announcement made after a meeting of its supervisory board, the group said in view of the upcoming talks, it will not be filling the position of chairman for now.
Current chairman, Konrad Hinrichs, is to join the supervisory board on Feb. 1, when he plans to play an active part in the search for a partner.
Coordination within the management board will then be undertaken by Chief Finance Officer Johannes Ohlinger. Hinrichs joined Holzmann in 2000 to initiate the group's turnaround.
The 150-year-old construction firm was rescued from bankruptcy at the end of 1999 following a last-minute intervention by Chancellor Gerhard Schröder, who persuaded creditors to agree to a DM4.3 billion rescue package, DM250 million of which was to come from the government.
But industry insiders still see it as unlikely that the group will be able to attract an industrial partner. For one thing, the German building industry is still in a very bad way.
For another thing, Holzmann has a debt burden of 1.6 billion euros. As a result of their participation in the rescue package drawn up by Schröder, Holzmann's creditor banks took control of the company, and they are still its owners.
In preparation for the upcoming negotiations, Holzmann has had a vendor's report drawn up, which will allow potential buyers a detailed insight into the state of the group's finances.
According to the outgoing chairman of Holzmann's supervisory board, Gerhard Neipp, the company is proving more successful than expected in asserting itself in the current economic climate, but it has still had to abandon all hope of returning to profit this year.
In the first half of the year, it booked a net loss of 56 million euros on construction output of 3 billion euros. It plans to issue its third-quarter figures on Friday.