German property firm Adler is to increase its capital in a bid to improve liquidity and raise funds for unspecified acquisitions.
The firm will issue 5,000,0000 non-par shares, in addition to the current 10,000,000 shares. Majority shareholder John Heikenfeld, the US real estate investor who acquired 88% of the company in 2005, will have first options on the shares. The remainder will go on offer to institutional investors in a private placement.
Heikenfeld needs to strike a balance between demonstrating his commitment to his investment and increasing its liquidity by bringing in more investors.
He is unlikely to exercise all his subscription rights.
Lars Kuhnke, a spokesman for the firm, said: “He’ll sign some to show his commitment to the firm but we’re confident of big interest from other investors.”
Kuhnke said the capital raised would fund the development of new projects that the company will “case by case” either sell or transfer to its asset management business. The firm is also looking closely at closed-end funds as “a potential new model” for the company.
Heikenfeld rescued Adler from insolvency after its parent company, Agiv, withdrew financing. He and his management team “renegotiated contracts, restructured the business and made the decision to stand the company on its own feet,” said Kuhnke.