IVG Falls Most Ever on Restructuring: Frankfurt Mover

IVG Immobilien AG, the German real estate investment company that hasn’t paid a dividend for five years, had its biggest-ever decline in Frankfurt trading after saying it needs to restructure its finances.

IVG dropped 41 percent to 77 cents, cutting its market value to about 159 million euros ($204 million). The Bonn-based company postponed its annual shareholder meeting to the end of July to develop financing measures and won’t pay a dividend for 2012, according to a statement today.

“We are already in a difficult market environment confronted with new additional changes in regulations, energy policy and the economy,” Chief Executive Office Wolfgang Schaefers said in the statement. “We will therefore adapt our entire financing strategy to the new challenges.”

IVG today reported a net loss of 98.7 million euros for last year and said its loan-to-value ratio of 70.6 percent, a measure of indebtedness, was higher than planned. IVG is seeking an investor in the fund that owns half of the London tower known as the Gherkin, spokesman Oliver Stumm said earlier this month. That’s after the lenders demanded that IVG reduce debt used to purchase the building.

“We interpret the statement to mean that IVG will be seeking to restructure its entire liability and equity capital,” Harm Meijer, an analyst at JPMorgan Chase & Co. in London, said in a note to investors today. “IVG is biting the bullet and committing to a full restructuring of what increasingly looks like an untenable balance sheet.”

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