GERMANY – Real estate company IVG has detailed plans to improve its finances by selling properties and focusing on institutional investors.
The company is facing liabilities from major maturing debts later this year and in early 2014, and it already put its Italian joint venture on hold.
In a statement, IVG warned that, between October 2013 and March 2014, it needed €120m in bridge financing – otherwise, this debt could potentially "jeopardise the existence of the company".
Overall, the strategic review and the necessary adjustments to the company's business plan could require a "notice of the loss of half the company's share capital", which would mean an AGM would need to take place immediately, IVG said.
The company that confirmed talks with debtors were ongoing and that its aim was to find a business plan all could agree on, and shareholders could vote on at the AGM, currently scheduled for 30 August.
According to IVG's recommendations, it aims to offload "around 60 smaller properties" by 2016 in order to "streamline" the portfolio.
It added there might be an additional "partial revaluation" of the portfolio, which currently has €22bn in total real estate assets under management, including the fund business.
IVG said: "This, plus annual reinvestments of €50m in the portfolio, is expected to increase the return on the company's own portfolio from around 5% currently to approximately 5.7% in 2016."
In its fund business, the company wants to "focus on institutional and semi-institutional investors" in future, targeting club deals and co-investments.
"From 2015," it added, "€100m per year is to be available for co-investments in the future, which is expected to lead to further investor funds to develop up to an additional €1bn in assets under management per year."
Additionally, the company announced further cost cutting amounting to €25m per year, which includes reducing the number of employees from 560 to 400 by 2017.