IVG Immobilien Loss Widens as Company Plans Debt Restructuring

IVG Immobilien AG (IVG), the German company that plans to restructure 4 billion euros ($5 billion) of debt, said its first-quarter loss widened as the value of its properties fell.

The net loss swelled to 45.1 million euros from 4.6 million euros a year earlier, the company said in a statement today. The value of IVG’s properties dropped by 42.5 million euros.

IVG, once Germany’s largest commercial property company by market value, has shed about 96 percent of its share price since 2008 following a series of writedowns in its property values and difficulties repaying debt. The company and its funds own commercial properties valued at 21 billion euros, including a stake in London’s Gherkin tower, according to the 2012 annual report.

IVG is working on a plan to restructure all of its debt, which it will present at its annual shareholders meeting on Aug. 14, the company said today.

The company must repay 3.2 billion euros of debt due by the end of 2014, which it borrowed to finance operations and property acquisitions, according to its annual report.

On March 27, IVG shares had their biggest-ever decline in Frankfurt trading after the company said it needs to restructure its finances. At the same time IVG reported a 2012 net loss of 98.7 million euros and said its loan-to-value ratio of 70.6 percent, a measure of indebtedness, was higher than planned.

The company is seeking additional investors in the fund that owns half of the Gherkin after lenders demanded that IVG reduce the debt used to purchase the building.

To contact the reporter on this story: Dalia Fahmy in Berlin at dfahmy1@bloomberg.net

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net

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