Afbeelding
In the current COVID-19 situation a lot (if not most) entrepreneurs in the leisure, tourism and hospitality domain have financial problems and even more specific cash flow problems. To stay afloat they have to dive deep into their reserves and or personal savings.
Future financial predicament
In many cases, because of the grace period granted by creditors, they have been able to delay payments. In doing so they “self-rescued” for the short-term, but have created a future financial predicament of which it might be difficult to recover. With no activities and income the liabilities keep growing and become a big concern. Equity is depleted and the value of the company gets close to zero.
Sitting ducks get eaten
Debt's mount and at some moment all perspective of a positive rebound is lost. That is when the threat described becomes an opportunity for entities in the market with deep pockets. These scavengers pay the minimum or symbolic amount of 1 euro and get their hands on otherwise healthy companies loaded with debt. They strip and gut the company from its assets and file for bankruptcy.
Stop transferring of business ownership
Provincial representatives noticed this process become an unwelcome reality over the last months. Ownership being transferred to (sometimes) international investors. It will be difficult to stop or block this development, but it is in everybody's interest to design policies to prevent this from happening.
Solution: new entity that grants future with existing ownership
Maybe a solution could be to create an entity, on a provincial level, that can take over these companies and allow them a longer runway to create a softer landing and develop a new potential future with the existing ownership. Economic/judicial ownership transfers to the new agency and operational ownership stays with the former owner. In 3 to 4 years the process gets reversed and the original owner can buy back their own company.
