WCM files for insolvency over loan crisis

German real estate company WCM Beteiligungs- und Grundbesitz has filed for insolvency after HSH Nordbank terminated a €200 mln loan agreement

'The intensive negotiations on the repayment of the loan, which had continued until this morning, were unsuccessful,' the WCM group said in a statement issued on Thursday. HSH plans to auction the shares assigned as collateral for the loan. WCM said its board had applied to a court to stop the share auction.

The real estate division of WCM was thrown into crisis on 18 October when it was notified by the bank that it was calling in the loan, without the option of consultation, WCM said. A period of one week was granted for the repayment of the loan and HSH advised WCM that if the loan were not repaid by October 25, the shares provided as collateral would be auctioned off.

WCM traces its roots back to 1766 when Augsburg-based entrepreneur Johann Heinrich von Schüle established a weaving mill and fabric printing factory in Heidenheim at the Brenz River.