Mar 23 2009
Claas Daun takes it on the chin in Germany
Of all the businesses German industrialist and “turnaround expert” Claas Daun has his fingers in around the globe, the German and South African businesses are arguably his crown jewels. In recent weeks, the German part of Daun’s empire has had to digest a few nasty setbacks.
Will the SA part of his empire sail through the crisis unaffected?
The company had its credit rating revised down and in Germany bloggers on finance portals speculated whether assets in South Africa might have to be sold.
First, the financial fortunes of the German companies in the Daun Group took a dramatic turn for the worse in the fourth quarter of 2008. Then came the news that Palla Creativ Textiltechnik, a textile company in the KAP Group based in Aachen, had gone into liquidation on 28 November.
In the first week of March this year Lauffenmühe, another textile company in the group, was put under curatorship. Most recently came the news that the company’s credit rating was revised down.
According to a local textile industry insider, even financially healthy companies in the group now have to deal with demands by suppliers for cash upfront.
KAP Beteiligungs AG is involved in South Africa via Kap International Holdings, which is, in turn, invested in Hosaf Fibres, Industrial Footwear, Feltex Automotive, Bull Brand Foods, Glodina, Jordan & Co and Brenner Mills.
Even before the latest setbacks, the German investment world was already gossiping about the “slippery slope” on which the Daun Group seemed to be. This is what a blogger wrote on the investment website Wallstreet-online.de in December last year (translation below):
Es ist schon schockierend wie die KAP Beteiligungs AG innerhalb weniger Monate so dermaßen heruntergewirtschaftet werden konnte. Ich kann mir vorstellen, dass er (Claas Daun) sich in einer sehr prekären finanziellen Lage befindet. Es ist einfach ein Jammer, was mit dieser Gesellschaft passiert ist. Na, es gibt ja noch so einiges in Südafrika zu liquidieren. Ums Überleben muss KAP vorerst wohl nicht kämpfen.
It is shocking to see how run down KAP Beteiligungs AG has become in just a few months. I can imagine that he (Claas Daun) must be in a very precarious financial position. What has happened to this company, is really sad. Of course, there are still a few assets in South Africa to liquidate. So, for the moment KAP won’t have to fight to survive.
Dear editor,
May I take the liberty to correct serious mistakes in your article:
- Palla Creative Textiltechnik was never part of the KAP Group;
- KAP International is not part of the KAP Group either. KAP sold its operating entities in SA last year to the management and retained only the property holding company KAP Textile Holdings.
- In 2008 the KAP Group had the best results ever, with sales of about €460 million and an EBT of about €70 million.
I cannot see anything “dramatic” for the listed company (Ffm) KAP Beteiliguns-AG.
Best regards,
Fried Moeller CEO
Dear Mr. Moeller,
I apologise for the abovementioned mistakes.
I’m especially angry with myself for missing the sale of the SA assets to the local management.
You didn’t deny that the company lost its good credit rating a few weeks ago. Does that mean I got that part right?
Regards,
Christo Volschenk