Germany's IVG Immobilien will be placed in the hands of its creditors after they and the company's shareholders approved an insolvency plan envisaging the exchange of debt for equity.
Germany's IVG Immobilien will be placed in the hands of its creditors after they and the company's shareholders approved an insolvency plan envisaging the exchange of debt for equity.
In a statement on Friday, Bonn-based IVG said the plan was approved by 99.47% of creditors' votes and 56.93% of the shareholder vote.
The insolvency plan now only requires confirmation by the insolvency court.
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%, IVG said in a statement.
The company, which sought creditor protection last August, said it expects the insolvency proceedings to be lifted in the third quarter of 2014.
IVG Immobilien’s share capital will be reduced to nil and then simultaneously increased by adding receivables and an additional cash component. Creditors taking part in the capital increase would also have to agree upon a partial waiver of their debts.
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.