Germany’s biggest companies in debt

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Top German companies have reached historic debt records. Borrowing and debts rose to 533 billion euros in one year, according to outlet reports

The net financial debt of Germany’s 150 largest listed companies reached its highest level ever this year, the Handelsblatt newspaper reported.

In just one year, the debt of large companies (excluding banks and insurance companies) rose 20 percent to 533 billion euros ($526 billion), the outlet said. Twenty-five German companies now have more debt than equity capital and many are planning to sell shares to reduce debt, the report said.

In addition, the central banks’ reversal in interest rates is causing the cost of new loans to rise significantly. Handelsblatt noted that corporate bonds currently provide an average annual interest rate of 4.3 percent, according to Bundesbank statistics. Just over a year ago it was 0.7 percent. “The trend has accelerated recently because investors expect rapidly rising interest rates given double-digit inflation rates,” he said.

DEUTSCHE TELEKOM BECOMES DEBT CHAMPION

The report emphasized that telecommunications giant Deutsche Telekom, which is included in the DAX index, has the largest net debt among German companies with an estimated 145.8 billion Euros.

Saxony’s state premier Michael Kretschmer warned that German companies are currently struggling to survive amid rapidly rising energy costs. According to the official, many companies are ready to halt their operations in a matter of weeks, not months.

A day earlier, Deutsche Presse-Agentur reported, citing a statement by Peter Adrian, president of the Association of German Chambers of Commerce and Industry, that some businesses in Germany may suspend operations as the energy crisis worsens.

 

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