Hello Everybody,
assuming I intend to buy a company with a 100 balance sheet of which 80 is Equity, 10 Liabilities and 10 a shareholder loan.... Seller wishes to have that shareholder loan "acquired".
Why would I acquire a loan? Don't you usually subtract Net Debt from the Enterprise Value?!
Why would I pay money for a future committment that is on the balance sheet already?!
I would appreciate help with this case very much! Thank you, Lars
Anybody?
It's not clear what you're asking. Either the loan gets paid back or it gets rolled over into the new balance sheet.
The loan was given to the company in order to fund an acquisition that has been integrated into the company by now. I'm not sure whether it would be a logical move by us to indirectly finance this past acquisition.
You say "Either the loan gets paid back or it gets rolled over into the new balance sheet."
**Isn't this the same in terms of a cash-flow perspective? **When we pay back the loan we have a -10 cashflow right now. When we roll over the loan into the new balance sheet, which will be owned by us after the transaction, we will have a -10 cashflow over the course of the next years.......
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