Japanese Ltd. becomes shareholder of a German GmbH

Business Case

A Japanese Ltd. is planning to become a major shareholder of an existing German GmbH. The German company?s business is horse breeding and exporting and these functions will be carried out by a newly established German GmbH.

In order to meet the defined business goals the GmbH needs financing of approx. 10 Mio. Euro in new capital funds.

Business Challenge

A Japanese Ltd. is willing to provide the German GmbH with a financial loan of 10 Mio. Euro through a new incorporated Seychelles company.

Questions to be considered:

  • A long-term investment strategy needs to be defined and agreed among all stakeholders.
  • How would the right process flow look like to meet the given "time to market" objectives?
  • What is the common interest rate in Germany for such loans, with a loan period of 3 years?
  • Are the capitalization rules applicable in this case?
  • What would the right process flow look like to meet the given "time to market" objectives?
  • What if the foreign Ltd. purchases 100% of the shares of the GmbH in future? Will this fact change the situation with the loan?

Our Approach

Consultinghouse provided fundamental consultancy concerning loan and principle capital management of the existing GmbH. By defining an individual M&A strategy the risk of the project could be set to a minimum while the efficiency of the existing company operating in Germany was not negatively affected but even increased over time.

  • Monitoring of the shares transfer from the German GmbH to the Seychelles Ltd.
  • Recommendation of a loan agreement between the Seychelles Ltd. and the German GmbH
  • Providing advisory consultation in business decisions and support with negotiations through the development of the business in Germany
  • Offering support on realizing the planned synergies (with a clear focus on the financial impact).
  • Preparing a plan of approach for the project in close collaboration with the managements of both companies.
  • Drawing up detailed integration plans for individual areas (sales, operations, finance, etc).
  • Support in bringing together different cultures.
  • Support in communicating the plan to all participating stakeholders.

Martin Wilke

Managing Director
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