IVG Immobilien's insolvency plan has taken legal effect after a Bonn court rejected complaints filed by a number of subordinate investors as well as Germany's largest association for private investors, DSW.

IVG Immobilien's insolvency plan has taken legal effect after a Bonn court rejected complaints filed by a number of subordinate investors as well as Germany's largest association for private investors, DSW.

In a statement on Tuesday, Bonn-based IVG said the plan - which was already approved by 99.47% of creditors' votes and 56.93% of the shareholder vote - will now be implemented with closing of the insolvency proceedings expected in the current quarter.

Under the plan, the creditors of a syndicated loan totalling €1.35 bn and a €100 mln loan originally extended by LBBW would end up with 80% of IVG's stock. Similarly, holders of a €400 mln convertible bond would take control of the remaining 20%.

The company, which sought creditor protection last August, will cut its debt by €2.2 bn as part of the operation.

'The lengthy and intensive negotiations with our capital providers have paid off,' commented Hans-Joachim Ziems, the member of the Board of Management of IVG Immobilien responsible for the restructuring.

NEW CEO
The company will be able to retain 80% of the jobs, or a total of 320 employees. Ralf Jung, former CEO of Allianz Alternative Assets Holding and former member of the management board of Dresdner Bank, will assume the role of CEO of the restructured group after joining as a consultant in early July.

IVG, Germany's largest property company by assets under management, entered self administration in November last year. The company filed for court protection after failing to reach agreement with creditors on the restructuring of its €3 bn debt pile.

In total IVG has €21 bn of assets under management, including €4 bn of property on its balance sheet and almost €12 bn held in its institutional real estate fund business.