IVG IMMOBILIEN AG - Insolvency plan takes legal effect - legal action unsuccessful
- Group debt will be reduced by over EUR 2.2 billion
- Insolvency proceedings expected to be closed in the current quarter
The insolvency plan for IVG Immobilien AG has taken legal effect. The Bonn Regional Court rejected the complaints filed against the plan by subordinate investors and Deutsche Schutzvereinigung für Wertpapierbesitz (DSW) in the final instance and denied further appeal against this decision. This means that IVG has cleared the decisive hurdle in the battle for the continued existence of one of Europe's largest real estate companies. The insolvency plan proposed by the IVG Board of Management will reduce the company's debt by around EUR 2.2 billion. This will primarily take the form of a debt-to-equity swap in which existing creditors of IVG Immobilien AG will exchange their receivables for newly issued shares in the company, thereby becoming new shareholders. "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 AG responsible for the restructuring. "Moreover, under difficult conditions in some cases, IVG's employees have demonstrated their perseverance and commitment, helping to return the company to a solid financial footing and make it operationally fit for the future." The company expects the execution of the plan and the closing of the insolvency proceedings in the current quarter.
Under the management of Hans-Joachim Ziems, the IVG Board of Management in its composition at the time had initially attempted to restructure the company without having to resort to insolvency proceedings. After no agreement was reached between the various capital providers, the restructuring was initiated using protective shield proceedings in accordance with the German Act on Simplification of Corporate Restructuring (ESUG) followed by self-administered insolvency proceedings, with the Düsseldorf-based lawyer Horst Piepenburg as the administrator. The insolvency proceedings lasted around 11 months and focused on financially restructuring the company and making it structurally fit for the future. "This was not possible without painful cuts for those involved," Ziems explained. "Leaving behind the current form of a diversified company in favour of the entrepreneurial independence of the core business areas was necessary in order to increase the strategic options and flexibility of the Group as a whole." The number of employees also had to be adjusted to a total of 320. "This means that around 80 percent of the jobs planned for the Group prior to the insolvency proceedings will remain in place," Ziems continued.
The company law measures set out in the insolvency plan will be implemented over the coming weeks, and will concentrate on structuring IVG Immobilien AG and its current subsidiaries IVG Institutional Funds GmbH and IVG Caverns GmbH as separate and independently operating companies. In future, IVG Immobilien AG will operate solely in the area of real estate (portfolio management business). As previously, Institutional Funds GmbH will focus on business with real estate funds for institutional investors. IVG Caverns GmbH will continue to operate underground storage caverns for oil and gas in northern Germany. A new holding company will be installed above the three IVG companies with the purpose of holding the shares of these companies. The shareholders of the holding company will be the current creditors of IVG Immobilien AG.
The main strategic measures have also been taken in terms of human resources. Ralf Jung, the designated CEO of the newly formed IVG group, has been working for IVG Immobilien AG as a consultant since the start of July. The former CEO of Allianz Alternative Assets Holding and former member of the Management Board of Dresdner Bank is preparing the handover of business from the current CEO for the period after the insolvency proceedings are closed.
Background: Key data on the insolvency plan proceedings at IVG Immobilien AG
| 21. Aug. 2013: | Initiation of protective shield proceedings |
| 01. Nov. 2013: | Initiation of self-administered insolvency plan proceedings |
| 13. Dez. 2013: | First creditors' meeting (reporting date) approves continuation under self-administration |
| 24. Febr. 2014: | Insolvency plan set out following positive preliminary examination by the insolvency court |
| 20. März 2014: | Creditors and shareholders at the discussion and voting meeting approve the insolvency plan with the required majorities |
| 13. Juni 2014: | Bonn Local Court (insolvency court) confirms the insolvency plan |
| 11. Juli 2014: | Bonn Regional Court rejects legal action |
| 15. Juli 2014: | IVG Immobilien AG insolvency plan takes legal effect |
Media Contact
Jürgen Herres
Tel.: +49 (0)228 / 844-133
juergen.herres@ivg.de
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