Workshop by Stefan Oesterhelt and Thomas Hug on the occasion of the ISIS) seminar on February 05, 2025 with the title "Financing"
Note: This language version is an automatically generated translation. The text may therefore contain linguistic and terminological errors.
view in original language (German)Paul Pleite (Switzerland) is the sole owner and Chairman of the Board of Directors of Reich AG (Switzerland). To avert impending personal bankruptcy, Reich AG grants the sole owner an unsecured loan in the amount of CHF 500,000, which corresponds to nearly the entire net worth of Reich AG. There is no written loan agreement. Repayment of the loan is extremely unlikely in the coming years due to Paul Pleite’s poor financial situation. The loan bears 5% interest, but the interest is capitalized annually.
An American group has a subsidiary in Switzerland that holds substantial non-operating liquid assets (CHF 200 million). These are made available to the Irish sister company as part of a cash pooling arrangement without any additional collateral. There is no written agreement. Although market-rate interest applies, it is not paid out to the Swiss subsidiary but is instead capitalized against the debt. From the subsidiary’s perspective, the contribution to the cash pooling arrangement has increased continuously over the past four calendar years, and there has never been—not even in the short term—a partial or full repayment. The Swiss subsidiary is subject to a regular audit. The auditor considers the receivable to be recoverable and does not insist on a valuation adjustment or write-off of the cash pool receivable (Variant: The group waives an audit of the Swiss subsidiary’s individual financial statements under commercial law as part of an opting-out arrangement).
During an audit by the FTA, the authority takes the position that the entire loan of CHF 200 million is simulated and is therefore subject to withholding tax (subject to partial recovery pursuant to the Switzerland/Ireland DTA).
Fitness Software AG is an ETH startup that, after many years of high R&D expenditures and losses, has developed a successful software application for monitoring blood pressure using smartphones and has been making it available to a Korean smartphone manufacturer under a license agreement since January 1, N. The startup is acquired on January 15, N, by a U.S. private equity investor for CHF 300 million, and shortly after the acquisition, the private equity investor grants the startup a subordinated loan of CHF 30 million at an arm’s-length interest rate of 3.3% due to the threat of over-indebtedness.
For the entire fiscal year, the (simplified) financial statements are as follows:
*) subordinated **) significant balance sheet losses due to long-term R&D activities until market readiness
*) incl. depreciation of mobile property, plant, and equipment 1
The private equity investor prepares its financial statements in accordance with IFRS and discloses the following purchase price allocation (“PPA”) as of February 1, N, for the acquisition of Fitness Software AG in the notes to the consolidated financial statements:
X. AG has received an (unsecured and subordinated) loan of CHF 4 million from its sole shareholder, X., which bears interest at 5% for the 2024 interest period. For a bank loan of CHF 1.5 million (personally guaranteed by X.), X. AG pays an interest rate of 4.75% during the same interest period.
X. AG takes out a bank loan of CHF 10 million guaranteed by X. and bearing interest at 6% p.a. In addition, X. grants X. AG a shareholder loan of CHF 1 million bearing interest at 5% p.a. However, according to the rules of KS 6a, X. AG has a debt capacity of only CHF 6 million.
