Wholesaler Makro preparing for bankruptcy after years of losses: report

Makro Nederland is preparing for bankruptcy, RTL Nieuws reports based on several remarkable transactions reported in the small print of the heavily loss-making wholesaler’s annual accounts. The retail chain transferred its valuable assets closer to German parent company Metro or will do so in the event of bankruptcy, according to the broadcaster.

Makro Nederland has 17 branches and 2,700 employees. It has suffered a total loss of almost 400 million euros since 2016. In the annual accounts, the company explicitly said it was not concerned about its continued existence because the parent company, Metro, provided the financing.

But Metro itself recorded a net loss of 331 million euros last year and has already shown that its patience with loss-making subsidiaries isn’t endless. Last year, Metro pulled the plug on Makro Belgium, selling the loss-making subsidiary to two reorganization companies, who bankrupted it within a few months.

According to RTL, Makro Nederland took several steps in September that could be useful in the event of bankruptcy. Firstly, several subsidiaries of Makro Nederland have concluded a deal with the holding company Metro Cash & Carry International Holding BV (MCCIH). The deal stipulates that “in the event of bankruptcy,” MCCIH may take over the tangible fixed assets within a lifespan of less than 20 years for the book value.

The book value of tangible assets is often lower than the actual value, so buying it at book value may be beneficial. The book value of the assets concerned is over 36 million euros. The annual accounts don’t mention the actual market value.

In the second remarkable transaction, MCCIH purchased the real estate company Metro Properties BV from two Makro subsidiaries for almost 234 million euros and rented it back. If the subsidiaries go bankrupt, these properties will no longer fall into the bankrupt estate but are the property of MCCIH.

According to RTL, the holding company is a Dutch company that forms part of the fiscal unity with Makro Nederland. But, the Chamber of Commerce register shows that MCCIH BV is fully owned by the German MCCIH GmbH.

Makro director Andries Govaert would not explain the transactions to RTL. “We are part of a German-listed company, and our parent company answers all press questions,” a spokesperson said.

Metro spokesperson Martin Neipp said that the company is not preparing for bankruptcy, calling the two transactions “an internal legal restructuring of the portfolio of properties to bring it in line with the standards that Metro applies.”