German real estate company IVG, which had been granted the right to administer its own insolvency procedures by a German court, has now also been given the green light on its proposed recovery plan.
The board of management is aiming for a debt/equity swap, a measure made legal for German insolvencies two years ago.
Additionally, the company’s equity will be reduced to zero, which means that, for the first time in 28 years, IVG will not be listed on the stock exchange.
The equity will then be increased by adding receivables and an additional cash component, IVG said.
In a statement, it added: “Creditors taking part in the capital increase also agree upon a partial waiver of their debts.”
Overall, entitled creditors will receive 60% of their capital, the company said.
“Initially”, there are no plans to trade the new shares on the stock market, IVG said, quenching rumours of a new IPO.
On 20 March, the creditors are to decide on the recovery plan, which also includes a split of IVG Immobilien AG.
Under the board of management’s plan, the company is to be separated into its three constituent areas of business – real estate, institutional funds and caverns, for the storage of oil and gas.
A new parent company is to be created structured as a non-listed financial holding, as sole shareholder of IVG Immobilien, IVG Institutional Funds and IVG Caverns.