Around 20,000 companies took out bridging loans (3.5 billion euros) from their banks during the corona pandemic. The state development bank Austria Wirtschaftsservice (aws) provides them with insolvency protection in the form of guarantees. Management consultant Gerald Zmuegg assumes that around ten percent or at least 300 million euros of loans cannot be repaid by companies. 140 million euros in loans are already considered “defaulted”.
Zmuegg advises 253 companies, including the Salzburg traditional costume company Gössl.
Gössl, with its 35 stores and 113 employees, is on the verge of bankruptcy because the main bank called in loans amounting to 3.4 million euros early. “It cannot be the case that the only winner in the event of bankruptcy is the bank,” says Zmuegg. “If we do not reach a solution with the bank, we will take legal action against the bank.”
The backstory
Gössl was economically healthy before the pandemic. But due to the Corona lockdowns, it posted losses of 9.9 million euros, but Gössl only received 5.9 million euros in Corona aid.
“The gap had to be covered differently; bridging loans with an aws guarantee were taken out,” says Zmuegg. Gössl accepted the loan conditions, even though it was clear after the first lockdown that repayment “wouldn’t work like that”. “The bank has a conflict of interest because it can only make use of the aws guarantees if the company in question goes bankrupt,” says the consultant. After the bank deferred the loan twice, the company was handed over to the bank’s restructuring department.
Continuously the pressure increases
“The pressure was continuously increased and Gössl had to struggle with liquidity bottlenecks,” says Zmuegg. “From today’s perspective, the company is doing a reasonable business, but is suffering from legacy issues from the Corona period.”
“An extension of the term and a possible debt restructuring were negotiated with the bank until the summer of 2024, unfortunately with no positive result so far,” it continues. “The bank refused to waive the guarantee given by the state and take on the risk itself.” The bank called the loans due early and without emergency at the beginning of September. However, the aws liabilities run until December 31, 2024 and the guarantees could have been drawn by the bank until June 30, 2025. At the same time, accounts with liquid assets amounting to 400,000 euros were blocked.
Shops open
“Here, Gössl was given a significant amount of time to hold discussions in order to find alternative solutions,” says Zmuegg. “On the one hand, it is about extending the term, which the bank rejects, and on the other hand, it is about politicians taking measures.” Postscript: “Gössl is being pushed into insolvency through no fault of its own.” Insolvency is due to be filed at the beginning of December. “Our shops are open and will remain open,” says Maximilian Gössl. “The Gössl brand will pass it on.”