GLOBAL – Only days before IVG is expected to reach an agreement on its restructuring, hedge fund Aurelius has voiced concerns over assumptions made on the "worst-case scenario" for the German real estate company.

IVG is currently negotiating with creditors on a restructuring of debt into capital and has to reach an agreement by 30 July.

But this week, Aurelius Capital Management, a hedge fund that owns more than 30% of convertible bonds issued by IVG Finance (a subsidiary of the IVG parent company), challenged some of the assumptions made by the real estate company.

IVG had put up on its website calculations by an independent auditor on an Entity Priority Model (EPM) – a worst-case scenario on the dissolution of IVG should the parties involved fail to reach consensus.

While crediting IVG on its transparency, Aurelius claimed the EPM contained "erroneous assumptions", inflating the recovery of certain loans while "understating the recovery for convertible bonds".

It said the "corrected" recovery estimates on IVG Finance's claim against its parent was €406m, rather than the €349m stated in the EPM.

An IVG spokesman told IP Real Estate his company would not comment on individual creditor's opinions.

However, he added that IVG chief executive Wolfgang Schäfers had told German media that "a bit of drumming is part of the business in the critical phase of negotiations".