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Business case:

A Japanese ltd. is planning to become a major shareholder of an existing German GmbH. The nature of the German company is horse breeding and exporting and will be performed 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 definied 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 are the requirements for the Ltd. to become a shareholder of the German GmbH?
• What if the foreign Ltd. purchases 100% shares of the GmbH in future? Will this fact change the situation with the loan?

How we helped:

We 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 effected but even increased over time.

• Monitoring of shares transfer from German GmbH to Japanese LTD.
• Loan agreement between Seychelles LTD and German GmbH
• Providing advisory in business decisions and further tax strategies 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).
• Offering help in bringing together different cultures.
• Offering help in communicating the plan.