Cash-strapped real estate group Immofinanz plans to swap EUR 1.5 bn worth of convertible bonds into new convertibles at a lower face value to avoid insolvency. The group, which in February launched a restructuring of its business to boost its liquidity, is offering holders of five outstanding convertibles new bonds worth EUR 600 mln.
Cash-strapped real estate group Immofinanz plans to swap EUR 1.5 bn worth of convertible bonds into new convertibles at a lower face value to avoid insolvency. The group, which in February launched a restructuring of its business to boost its liquidity, is offering holders of five outstanding convertibles new bonds worth EUR 600 mln.
'The success of the exchange offer also considerably contributes to the avoidance of an insolvency of Immofinanz and resulting adverse effects on Immoeast,' the company said this week.
The new bond matures in December 2011 and has a coupon of 7% per year. Participating bond holders will also receive a cash bonus of EUR 5,000 for each exchanged convertible bond (with a nominal amount of EUR 100,000 each) maturing in 2014 or 2017, respectively. Immoeast, Immofinanz's CEE development arm, is issuing a promise of guarantee to the holders of the new convertible bond.
Assuming full acceptance of the exchange offer, the company's equity would be increased by up to EUR 825 mln. The exchange offer runs until 23 April 2009.
