IVG Immobilien Said to Start $3.9 Billion Restructuring TalksJulie Miecamp and Dalia Fahmy
IVG Immobilien AG, the German real estate company that plans to restructure more than 3 billion euros ($3.9 billion) of debt, starts talks with creditors today, according to two people with knowledge of the matter.
The company is seeking to conclude talks by the end of June so it can present a financing plan to its annual shareholder meeting, according to the people, who asked not to be identified because the talks are private. The shareholder meeting is currently due to take place on Aug. 14.
IVG, whose share price has dropped about 97 percent since 2008 following a series of writedowns in its property values, needs to repay more than 2 billion euros of loans next year. The Bonn-based company owns commercial properties valued at 21 billion euros and reported a 45 million-euro loss in the first quarter of 2013.
The company asked creditors to form committees and appoint advisers before financing talks, it said in a May 24 statement. It then appointed Hans-Joachim Ziems to lead a newly-formed restructuring division, according to a May 28 statement. Rothschild is also advising the company.
Creditors invited to negotiate include holders of 2.4 billion euros of syndicated loans maturing September 2014, a 400 million-euro hybrid deal and a 400 million-euro convertible bond, IVG said.
A spokesman for IVG, who asked not to be named citing company policy, declined to comment on the timing of the restructuring talks.
A group of loan holders hired Blackstone Group LP as financial adviser and Kirkland & Ellis LLP as their legal counsel, said three people, who asked not to be identified because the matter is private. Advisers have been hired by each of the other debt-holder groups, the people said.
A spokesman for Blackstone, who asked not to be identified citing company policy, declined to comment. Officials at Kirkland & Ellis didn’t immediately respond to an e-mail and telephone call seeking comment.
IVG changed the address of the borrower of the convertible bond, IVG Finance BV, to London, it said May 24. European companies sometimes move their center of main interest to London to use English legal mechanisms to restructure debt.
Holders of the convertible bond can request payment from March 2014, according to its latest annual report.