Investment Opportunities in Greece: Understanding the Distressed Business Landscape

Distressed M&A involves the acquisition of assets, shares or businesses where the seller or the target company is in financial distress. Distressed companies seeking debt restructuring in Greece have access to two processes: out-of-court workout or business rehabilitation. The pros and cons of each process are discussed in detail.

As in traditional M&A, an acquisition in the context of a rehabilitation agreement may involve either a share deal or an asset deal. Share deals may be realised either through a merger with the target company, the direct acquisition of new or existing shares in the target company, or the acquisition of shares in a new company created following a spin-off or demerger. Asset deals are structured as a hive-down or carve-out of individual assets to a new company.

The main advantage of investing in a distressed company through a rehabilitation agreement is the cram-down of non-consenting creditors. Even creditors who do not participate in the rehabilitation agreement shall see their claims written off in a binding and conclusive manner. Another benefit concerns tax incentives, which are explained in detail.

The legal framework in Greece presents distinct advantages to investors. There is expected to be a wave of distressed companies in Greece, creating a window of opportunity for investors, sovereign wealth funds and trade buyers to enter the market.