German real estate company IVG Immobilien has submitted an insolvency plan that will see it swap debt for equity and place the company in the hands of its creditors.

German real estate company IVG Immobilien has submitted an insolvency plan that will see it swap debt for equity and place the company in the hands of its creditors.

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.

IVG, which sought creditor protection last August, said the plan will be discussed and voted upon on March 20, 2014.

If the plan is accepted by the creditors and confirmed by the court, the insolvency proceedings can be lifted in the first half of 2014 as planned. 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.

Wolfgang Schäfers, CEO of IVG Immobilien, said he is 'confident that creditors will accompany the company down this road'.''The board of management is convinced that, with this plan, it has developed a concept that allows for a complete restructuring of IVG and that has created a structure that is fit for the future,' he added.

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.