IVG Immobilien has revealed details of its insolvency plan which includes a debt-for-equity swap and a group restructuring.
The listed German property investor said that the plan deploys the option provided for by law to swap receivables for new shares – known as a debt-equity-swap. In addition, IVG’s share capital will be reduced to zero and then simultaneously increased by adding receivables and an additional cash component. It said that creditors taking part in the capital increase also agree upon a partial waiver of their debts.
Initially there will be no application for trading of the new shares on the stock market. ?
IVG added that for “entitled” creditors, the insolvency plan provides a quota of at least 60%, depending on the ranking of the receivables and their collateralisation. A meeting to discuss and vote on the plans has been set for 20 March 2014.?
It is understood that a consortium led by Cerberus Capital Management, Marathon Asset Management, Värde Partners and Aurelieus Capital Management are participating in the swap.
IVG has €3.2bn of real estate, as well as an €11.8bn institutional fund amangement business, a €3.4bn retail fund management business as well as a caverns business which stores gas and oil.
The CEO of IVG Immobilien AG, Dr Wolfgang Schäfers, said: “The board of management is convinced that with this plan it has developed a concept that allows for a complete restructuring of IVG and that has created a structure that is fit for the future. We are confident that our creditors will also accompany us down this road.” ?
In implementing this insolvency plan, IVG Group will also set up new structure.
The group will concentrate on the core business areas of real estate and institutional funds.
IVG Immobilien AG itself will concentrate on the real estate business area in the future.
Services that have until now been performed centrally for all divisions, such as human resources and other cross-departmental functions, will be directly allocated to and integrated in the operating units of real estate and institutional funds as needed.
The same applies to asset management functions, which were previously combined in a central unit. As a result, the envisaged employee capacity of 400 people for the group, which was announced last year, has been lowered to approximately 320 employees. Further details are currently being negotiated with the works council.
The aim of the new structure is to allow each division to implement its business activities with its own entrepreneurial responsibility. The role of a parent company and a sole shareholder of IVG Immobilien AG, IVG Institutional Funds GmbH and IVG Caverns GmbH, will be a new company which will structured as a non-listed financial holding.
bridget.oconnell@estatesgazette.com
