IVG Said to Mull Court-Approved Restructuring Amid Debt Talks
IVG Immobilien AG (IVG) is examining whether it qualifies for a court-supervised restructuring after the debt-laden German real estate company’s creditors failed to offer an alternative by yesterday’s deadline, a person with knowledge of the matter said.
IVG hired a law firm that will determine whether the Bonn-based company meets the criteria for a “Schutzschirmverfahren,” Germany’s equivalent of the U.S. Chapter 11 bankruptcy, said the person, who asked not to be named because the information is private. IVG is seeking to renegotiate more than 3 billion euros ($4 billion) of debt.
The missed deadline means IVG shareholders won’t vote on a proposal at the Sept. 12 annual meeting and the company will “examine whether the positive going concern forecast for IVG Immobilien AG can be upheld,” IVG said in a statement after the market closed yesterday. If the restructuring begins, the company will have three months to reach an agreement with creditors under the supervision of a court-appointed administrator.
IVG will hold further talks with creditors about an out-of-court restructuring deal, according to the person. A consensual restructuring would ensure “the greatest possible preservation of value for all the company’s stakeholders,” IVG said in yesterday’s statement.
A spokesman for the company declined to comment.
IVG, whose shares have lost more than 99 percent since 2007 after the value of its assets plunged, began negotiating with holders of its loans and bonds in May. The company needs to raise as much as 120 million euros after losing access to its subsidiaries’ income and to help cover the cost of the refinancing efforts, according to a July 19 statement.