“The Flemish government is not going to build buses.” The reaction of Flemish Minister of Economy Jo Brouns (CD&V) on Monday after the works council at Van Hool speaks volumes. The Flemish government wants to see whether it makes sense to save the bus builder from collapse, but such an intervention will only be temporary and is subject to three conditions.
The first is that Van Hool must maintain a strong base in Flanders. The company’s recovery plan involves approximately 1,400 employees remaining. If indirect employment is added, this amounts to almost 3,000. For Brouns, who went to Koningshooikt on Monday afternoon to discuss the situation with management and the unions, that is “worth fighting for”.
In addition, the Flemish government also requests the input of a private partner. This has not yet been found, despite the long search that Van Hool himself has already completed. The chance that a suitable partner will eventually emerge is not that great, this is recognized in all parties of the Flemish government.
But he is necessary, as the Flemish ministers only want to intervene temporarily to prop up the company. Without a private partner, the provisional contribution to the bus builder threatens to quickly become permanent.
The board of directors of Gigarant, the Flemish institution that had already provided 30 million euros in credit guarantees to Van Hool, appointed an external advisor on Tuesday to re-examine the plan of the new Van Hool CEO Marc Zwaaneveld, now that has been proposed. That will easily take several weeks, but it will have to be done quickly, because bankruptcy is already threatening by the end of the month.
Commitment banks
And then a firm commitment from the banks is also needed. The four major banks (Belfius, KBC, ING and BNP Paribas Fortis) met with the top of the Flemish government on Monday afternoon to review the situation. Both the banks and the Flemish government have promised to “thoroughly review” Van Hool’s transformation plan, but their commitment does not go further than that for the time being.
Especially in this situation, the banks will want to cover themselves as much as possible before granting Van Hool loans. They will demand new credit guarantees from the Flemish government before they want to do business with the bus builder.
The amounts required are substantial: up to 150 million euros. Gigarant has already been heavily committed elsewhere, including in Ineos’ investment in the port of Antwerp. An alternative to Gigarant is an investment through the Flemish investment company PMV, but that also threatens to be a longer-term commitment than the Flemish government now wants to make.
Somber
The conditions set by the Flemish government to save Van Hool have therefore not been met. “There is no point in making big promises today,” sounds gloomy in the Flemish government. “We will not be able to save this company alone, and the banks are watching the cat out of the tree for the time being. It will be a major challenge to bring this crisis to a successful conclusion.”
The rescue will probably not come from the federal government. A possible bankruptcy of Van Hool also has consequences at a federal level: the fund for closing companies would have to pay severance pay, and the social security debts are in danger of never being paid. But the federal government regards Van Hool as a Flemish file and leaves any rescue plan entirely to the Flemish government. “We do not want to deny the Flemish nationalists the opportunity to save their companies,” he said cynically off the record.
