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Difko UKAbout DifkoDifko´s historyDifko´s history 1981-1988print venlig side

1980 - 1988

Shares worth DKK 300m sold in three days
Up till 1981, Difko had raised a total of DKK 0.5bn from those investing in the 16 first companies. From 1983 and throughout the 1980s, partnerships worth several billion Kroner were sold in new companies. The end of the 1970s and the beginning of the 1980s saw politically imposed ceilings on loans, so it was not unusual for various companies to lease machinery or manufacturing plant from a Difko company. Difko also leased vessels to the Royal Greenland Trading Co and DFDS, which leased the Dana Anglia ferry from K/S Difko 21 for the Esbjerg-Harwich route. It only took three days at Christmas 1982 to sell partnership shares totaling DKK 300m in K/S Difko 21.

In the following years, Difko raised DKK 0.5bn in just a few days from private investors, and in the mid-1980s, between five and six major partnership projects were marketed and sold every year. The money was used to fund ships, agricultural machinery, real estate and manufacturing plant. Difko had set a new standard in the partnership provisioning market. In the mid-1980s, it was far and away the largest recipient of ships from Danish shipyards. The Difko projects thus helped ensure employment for thousands of shipyard workers.


Difko projects help create Danish jobs 

Most partnership shares were sold for DKK 12,300 each and investors were normally liable for DKK 50,000 per share. On this basis, the partnerships could borrow from the banks at preferential rates and so supplement the cash funds paid in by investors. K/S Difko 47 set the record with 21,000 shares sold, which generated capital of more than DKK 1bn for the company.

Demand for shares grew faster than Difko and the other partnership providers could manage to set up new projects. One important feature of buying partnership shares was the possibility of postponing payment of income tax. Investors were allowed to deduct their share of a company's depreciation and deficits from their personal income and in this way defer tax payments for some years. The tax deferment angle was the reason that many bought shares and investors often failed to make a sufficiently thorough analysis of the risk of the project and the size of the liability they had signed up for. This led to unpleasant surprises for some of the investors in the companies that ran into financial difficulties, which then needed to call on some or most of outstanding liabilities.

Fortunately, some of these companies enjoyed a turnaround, with their temporary difficulties reversed, leading to many of them having become sound businesses by the time the companies were finally wound up. Results of partnership investments can only actually be determined when the project has been wound up and the company liquidated.


Difko A/S • Sønderlandsgade 44 • DK-7500 Holstebro • Tel.: +45 70 11 75 00 •