German landlord Adler Group SA is preparing to overhaul its debt in the UK after getting support from a “sufficient majority” of its creditors for a deal.
(Bloomberg) — German landlord Adler Group SA is preparing to overhaul its debt in the UK after getting support from a “sufficient majority” of its creditors for a deal.
The company said it created a new English subsidiary — called AGPS BondCo Plc — as a principal debtor of all its bonds, in a move that will allow it to file a restructuring plan in England, according to a statement.
Adler has been negotiating for months with its creditors after it was targeted by a short seller and hit by a slowdown in German property transactions. It had clinched a deal with some of its creditors in November to raise a new loan to pay back some bonds, while also extending maturities and getting permission to pay interest with more debt.
However, it failed to get support from 75% of holders for each of its notes, as required under German law, as SVP and other investors that own the companies longest dated securities coalesced to push back on the deal.
Bonds coming due in 2023 and 2024 are now indicated at around 90 cents on the euro, while longer-dated notes are trading at less than 35 cents, according to data compiled by Bloomberg. Shares fell as much as 5% on Thursday and they are close to a record low reached two weeks ago.
An English restructuring plan can prevent dissenting classes of creditors to block a proposal that goes in the best interest of the company, if approved by a judge. Adler said it now has support of 78% of its bondholders across all of the notes.
As part of the deal, Adler is also asking its creditors to waive the need for audited accounts for longer. A Berlin court mandated KPMG to audit the accounts of key subsidiary Adler Real Estate but the accountancy firm has rejected the mandate, according to a separate statement on Wednesday.
(Updates with share price in fifth paragraph.)
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