The long slide in German factory output continued in July, increasing the risk that the eurozone’s largest economy is falling into a second straight quarter of contraction, the Wall Street Journal reported. German factories have been faltering since 2018, but suffered a fresh blow when energy costs surged in the wake of Russia’s invasion of Ukraine in early 2022. Despite some hopeful signs at the start of this year, they have yet to embark on a sustained recovery.
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German PV project developer Fellensiek Projektmanagement GmbH & Co. KG (FPM Projektmanagement) has filed for bankruptcy due to liquidity problems, PV-Magazine.com reported. The Wilhelmshaven District Court in northern Germany has ordered provisional insolvency administration for Fellensiek, appointing Christian Kaufmann from Pluta Rechtsanwalts GmbH as the provisional insolvency administrator on Sept. 3. Kaufmann said that business operations will continue with the 20 employees, and their salaries will be secured for three months.
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Germany plans to sell a significant part of its stake in Commerzbank AG as it seeks to draw a line under the lender’s bailout more than a decade ago, Bloomberg News reported. Berlin, which owns 16.5% of Commerzbank, will initially target a disposal of 3% to 5% in the Frankfurt-based firm. That could happen as early as this month, with more sales possible at a later date. The German government joins other European administrations including Italy, the Netherlands, the UK and Greece in selling down bank stakes they acquired through various bailouts during the financial crisis.
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Deutsche Bank AG bolstered the size of a significant risk transfer by $1 billion after strong investor demand, Bloomberg News reported. SRTs, also known as synthetic risk transfers, allow banks to insure their loans against default by selling notes to investors such as pension, sovereign wealth and hedge funds. For banks, the benefit is that they are able to tie up less of their own capital to meet regulatory requirements. Some of the SRTs have been priced at a yield in the low double digits.
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BlackRock Inc. has initiated an auction for German startup SellerX, taking the unusually aggressive step after a loan granted to the Amazon aggregator soured, Bloomberg News reported. An advertisement published Friday in the Börsen-Zeitung newspaper stated that the auction for the L Catterton-backed firm has been scheduled for Sept. 17 at a Berlin hotel. In Germany, such auctions can be used by creditors to seize control of companies after negotiations between an enterprise, investors and lenders have hit an impasse, often wiping out equity held by investors.
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German inflation slowed to the European Central Bank’s target in August — supporting the case for another cut in interest rates next month, Bloomberg News reported. The 2% reading — the lowest since 2021 — was down from 2.6% in July and less than all but one economist surveyed by Bloomberg had estimated. A report earlier Thursday showed that price pressures also eased significantly in Spain, reaching a one-year low. The disinflation trend is expected to play out in the euro zone’s other two biggest economies — France and Italy — when numbers are published Friday.
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