Monday, February 24, 2014

"Gherkin" Tower Owner IVG To Swap Debt For Equity

Per, there has been progress in the German insolvency proceedings of the co-owner of London's "Gherkin" tower:

Tue., February 25, 2014
Germany's IVG Immobilien , the co-owner of London's landmark "Gherkin" tower brought low by debts and cost over-runs, has proposed a debt-for-equity swap that will put the real estate firm in the hands of its creditors. IVG, which owns the Gherkin tower with Evans Randall Ltd, sought protection from creditors in August after failing to reach an agreement over the restructuring of its debt and on Monday filed an insolvency plan to a court in Bonn, Germany. One of Germany's best known real estate firms, IVG amassed over 4 billion euros ($5.5 billion) in debt during a rapid expansion when it financed a business and hotel complex located at Frankfurt airport called "The Squaire" that suffered from cost over-runs. It was also hit by a growing unwillingness among European banks to provide new loans, a consequence of a continent-wide credit crunch, and new regulations forcing lenders to cut their exposure to property. Under its proposal which must be approved by the court, IVG will reduce its capital to nil and then issue new shares that some of its creditors can take up in exchange for outstanding debt. That way, the creditors will get back at least 60 percent of their investment, while equity investors will lose their holdings.

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