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Shareholding as a Service
A Luxembourg Solution for Distressed Ownership
The challenge
Businesses across Europe are under growing financial pressure. Rising interest rates, energy costs, disrupted supply chains and declining asset values have triggered a sharp increase in distressed situations, particularly in real estate, manufacturing, chemicals and automotive. For lenders, debt funds and special situations investors, the question is no longer whether distressed ownership will arise, but how to manage it efficiently.
Traditional responses are often inadequate. Court-supervised insolvency proceedings are slow, costly and disruptive. Direct shareholding by creditors carries regulatory, accounting and governance burdens, including consolidation risk, capital charges and governance obligations that many institutions cannot absorb. And in complex cross-border structures, the window to act quickly and preserve business value is narrow.
If you are a lender, a debt fund or a special situations investor navigating a distressed situation, The Clean Break is your starting point. Our two-page briefing sets out how ShaaS works in practice, from the mechanics of Luxembourg enforcement to Arendt’s integrated offering, in the time it takes to read a term sheet.
The Solution: Shareholding as a Service
Shareholding as a Service (ShaaS) is a Luxembourg-based structuring solution designed for exactly these situations. A dedicated, independent vehicle, the ShaaS Vehicle, acquires, holds and administers equity in a distressed company or asset on behalf of creditors and other stakeholders, giving all stakeholders involved the time and stability needed to agree on a longer-term solution or facilitate a structured exit.
ShaaS works by separating economic interest from direct beneficial ownership. Creditors avoid the burden of holding shares directly, while retaining the ability to steer the recovery and protect their position. The ShaaS Vehicle operates with full governance neutrality, acting as a credible and independent shareholder committed to preserving and enhancing asset value.
ShaaS is well suited to situations where:
- Existing shareholders are unable or unwilling to support the business
- No buyer can be found at a fair price in the short term
- Creditors are prevented from holding shares directly for legal, tax or regulatory reasons
- A bridging solution is needed pending regulatory approvals, for instance during a debt-to-equity swap
Why Luxembourg?
Luxembourg is the natural home for ShaaS structures. Its legal framework provides two clear, tested pathways to transfer ownership to the ShaaS Vehicle:
Enforcement.
- Where lenders hold a pledge over the shares of a Luxembourg holding company at the top of a group structure, a standard feature of cross-border financings, they can enforce that security through Luxembourg’s appropriation mechanism. This is highly efficient: it can be completed in a single day, requires no court involvement and delivers a clean, certain change of ownership. It is the leading out-of-court enforcement tool in European restructurings.
Consensual transfer.
- Where all parties are aligned, shares can be transferred to the ShaaS Vehicle on a negotiated basis, typically as part of a broader restructuring agreement. In either scenario, the outgoing shareholder receives a clean break and is fully released from the obligations and liabilities associated with the business.
Why Arendt?
Arendt is the only Luxembourg firm that can offer ShaaS as a fully integrated service, combining legal structuring, tax advice and operational administration under one roof.
Arendt & Medernach has advised on a range of complex restructuring transactions in which a ShaaS structure formed a central part of the solution, across multiple industries and creditor profiles. Our teams have direct experience of the legal, governance and enforcement mechanics that make ShaaS work in practice.
Arendt Investor Services has launched a dedicated ShaaS platform, a professionally managed and operationally ready vehicle that can be mobilised quickly in distressed situations. The platform is designed to assume legal ownership of the distressed company or asset from day one, with the governance infrastructure and reporting capabilities needed to reassure all stakeholders.
The two entities work in close coordination on every mandate, ensuring that legal structuring, tax positioning and operational servicing are fully aligned from execution through to exit. This integrated approach is a material advantage in situations where speed, confidentiality and coordination across multiple workstreams are critical.
Download the Briefing
If you are a lender, a debt fund or a special situations investor navigating a distressed situation, The Clean Break is your starting point. Our two-page briefing sets out how ShaaS works in practice, from the mechanics of Luxembourg enforcement to Arendt’s integrated offering, in the time it takes to read a term sheet.
Contact our experts
Dominik Pauly
Partner
Véronique Marty
Director, Member of the Management Committee