After much speculation and rumors about the tourism group FTI Group, an investor has been found. But he takes over the company with its around 11,000 employees for just a single, symbolic euro. Why that’s not so unusual.

It is significant: months of negotiations and deliberations, fresh capital amounting to 125 million euros and probably a sophisticated plan with a well-developed strategy. And everyone just talks about the “spectacular” symbolic purchase price of one euro. It’s about the case of the FTI Group, which is bought by a consortium led by the US investor Certares.

Nadine Schug is a lawyer at Rödl

Without being able to assess what the agreement is based on in detail, such an agreement is not dubious or unusual per se. In addition, FTI’s creditors and contractual partners have every reason to be happy. There is no existing shareholder here who leaves the sinking boat and first “fills his pockets”. On the contrary: the existing shareholder does not receive more than the symbolic euro; the remaining investment benefits the company.

But how do such prices come about? The company valuation as a basis for determining the purchase price is based on various procedures. Regardless of which valuation method is chosen, the result may be a negative company value. Then the investor walks away from the transaction or just offers a symbolic purchase price.

If the investor still sees potential in the company due to its expertise and strategic possibilities and is prepared to get it back on its feet with know-how and a network, deals arise like those with the Munich-based FTI Group, the third largest travel provider in Europe.

But shouldn’t the investor factor in this potential and pay the existing shareholder a higher purchase price? Not necessarily. The potential is also paid for in such a way that the investment goes where it is needed – in society. In the FTI deal, the investor should also provide fresh capital for the next growth phase and to finance the digital transformation.

In the past, there have always been takeovers of stumbling and ailing companies at a symbolic purchase price of one euro, as was recently the case with the new owners of Signa (Rene Benko) and the corresponding companies such as Galeria Kaufhof – the minimum purchase price then falls with a comprehensive restructuring package worth millions that will be raised to establish new structures and sustainably improve and secure the economic situation.

Such a change in shareholders can have positive effects in many ways and help with restructuring and reorganization. In this way, a new investor may create trust among financiers and business partners. In addition, an investor who, as here, is not only a financier but can also strategically help the company grow with industry experience, has great expectations.

A change of shareholder is not a real “new beginning”. The investor takes over a company as it is – with all liabilities, employees and corporate law peculiarities. The work is just beginning: The company must try to achieve the turnaround on its own with the resources provided and the support of the investor. The company must take and implement measures to restructure the company in the long term. Despite the deal, there are no easier options for reducing liabilities.

It remains exciting to see whether this will succeed on our own. After all, there are currently 11,000 employees involved. Regardless of this case, it should always be said that even if a solution is not found, it does not have to mean the end.

For this purpose, the StaRUG (Law on the Stabilization and Restructuring Framework for Companies) provides a set of instruments through which struggling companies can achieve a haircut. If the restructuring requires more than just financial restructuring, insolvency proceedings also offer extensive restructuring options.

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