IVG Immobilien has had its insolvency plan approved by a German court, clearing the way for a €2.2bn debt reduction programme.

The Bonn Regional Court rejected complaints against the plan by investors, denying further appeal.

IVG said insolvency proceedings – which have so far lasted 11 months – would now be closed by the end of this quarter.

Subordinate investors and Deutsche Schutzvereinigung für Wertpapierbesitz (DSW) were denied further appeal against the court’s decision, giving IVG the go-ahead to implement a debt-for-equity swap in which existing creditors of IVG Immobilien would exchange their receivables for newly issued shares in the company, becoming new shareholders.

Hans-Joachim Ziems, IVG Immobilien board member responsible for the restructuring, said: “The lengthy and intensive negotiations with our capital providers have paid off.

“Moreover, under difficult conditions in some cases, IVG’s employees have demonstrated their perseverance and commitment, helping to return the company to a solid financial footing and make it operationally fit for the future.”

Company law measures set out in the insolvency plan will be implemented over the coming weeks, IVG said.

IVG Immobilien and its current subsidiaries, IVG Institutional Funds and IVG Caverns, will run as separate and independently operating companies. 

IVG Immobilien will operate solely in real estate, while Institutional Funds will focus on business with real estate funds for institutional investors.

IVG Caverns will continue to operate underground oil and gas storage caverns in Northern Germany.

A new holding company will be installed to hold shares in the three IVG companies.

Shareholders of the holding company will be current creditors of IVG Immobilien.