IVG completes refinancing, exits insolvency
A year after filing for creditor protection, Germany’s erstwhile listed heavyweight property company IVG Immobilien AG has exited its self-managed insolvency proceedings, one of Germany’s largest-ever corporate collapses, and so has avoided its once-feared filing for liquidation.
A Bonn court lifted restrictions on the company, which has now appointed a new supervisory board and cut ties with remaining previous management. The group’s former creditors, mainly hedge funds and opportunity funds, become the company’s new owners after a €2.2bn debt-for-equity swap.
IVG also announced this week that it had completely refinanced €1.5bn of debt with Deutsche Bank, with IVG bundling various outstanding loan facilities and individual liabilities into two new loan agreements with the bank. New CEO
Ralf Jung said in a statement, “The company has strong capital resources following the successful conclusion of the refinancing, and this is a solid foundation from which to play a leading role in the market for office property in Germany once again.”
IVG has a current property portfolio of about €3.5bn, making it still the largest portfolio manager for office property in Germany. The new supervisory board is chaired by Dietmar Binkowksa, former CEO of NRW Bank. Former lenders and now new owners are reported to include Cerberus Capital Management, Marathon Asset Management, Varde Partners, Aurelius Capital Management and Davidson Kempner Capital Management.
IVG clarified in a recent statement that it has taken a new operational direction, establishing three business areas as independent business units - real estate, institutional funds and caverns. It sold its €3.5bn private fund business to Stuttgart-based closed-end fund manager Deutsche Fonds Holding in March. Assets under management – including around €11bn in the institutional funds unit which it is still holding on to, are worth over €15bn.
Meanwhile, US private equity giant Blackstone has signed on the acquisition of the 130m-tall Pollux office tower in Frankfurt’s Westend central business district from IVG Institutional Funds. The 32,000 sqm Pollux property over 32 floors is largely vacant and after been tenanted by Commerzbank for many years, and is being sold for an undisclosed price, but thought to be more than €100m at least. Blackstone is partnering with co-investor Finch Properties Asset Management on the deal.
Blackstone has also committed to buy the nearby Messeturm scheme from German fund managers GLL and KanAm for €250m. The asset had been said to be optimistically valued at €400-500m.
Built in 1991 by Tishman Speyer as Europe’s largest skyscraper, the 247-metre high office tower offers 62,000 sqm over 63 storeys. Its main tenants are Goldman Sachs and the Bank of New York Mellon.
GLL and fund manager Kanam bought the asset from the developer for around €440m in 2002. The tower is about 70% leased. The building, which is being sold through JLL, was refinanced in early 2012 with a €155m loan from Pbb Deutsche Pfandbriefbank and Landesbank Baden-Württemberg (LBBW).