Adler Group SA’s assets plunged last year as the company raced to sell properties to help cut debt just as rising interest rates started to crimp valuations.
(Bloomberg) — Adler Group SA’s assets plunged last year as the company raced to sell properties to help cut debt just as rising interest rates started to crimp valuations.
The embattled German landlord reported net assets of €2.44 billion ($2.7 billion) at the end of 2022, down 42.8% from a year earlier, according to a statement Tuesday. That was driven by portfolio sales, as well as a 1.9% writedown in the value of its retained portfolio and the write-off of receivables.
The company’s loan to value ratio — a measure of its relative indebtedness — soared to 74.5%, up from 62.7% a year earlier and well above the 60.9% threshold required by its bond covenants. That’s before a further €900 million of fresh debt from existing creditors is taken into account. The deal, approved by a London restructuring court earlier this month, was designed to buy the company time to dispose of its remaining assets in a more orderly fashion and maximize pricing.
“The year was characterized by a challenging market environment with rising interest rates and prices,” Adler Group Chief Executive Officer Thierry Beaudemoulin said. “Additionally, the year was marked by the strategic portfolio disposals that we initiated back in 2021 and continued to implement last year. We are fully committed to sensibly deleveraging the group.”
Short seller Viceroy research and an anonymous whistle blower accused the landlord of being run for the benefit of tycoon Cevdet Caner in 2021, triggering a collapse in the group’s share price and a race to sell assets. That’s since been compounded by the impact of rising interest rates, which have begun to dent German residential property values.
Adler and Caner have denied the allegations. The company hired KPMG to conduct a forensic audit, which cleared Adler of systemic fraud but failed to disprove many of the claims. KPMG subsequently quit as auditor and the landlord has yet to find a replacement.
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