IVG Immobilien AG / Release of an announcement according to Article 37x of the WpHG [the German Securities Trading Act]
17.07.2014 10:19

Interim report according to Article 37x of the WpHG, transmitted by DGAP - a company of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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IVG Immobilien AG: Interim Report on 3Q 2013

Interim report according to Section 37x of the German Securities Trading Act (WpHG)

The business performance of IVG Immobilien AG (ISIN DE0006205701) in the third quarter of 2013 was especially influenced by the initiation of protective shield proceedings ('Schutzschirmverfahren') according to Section 270b of Germany's Insolvency Code (InsO) as a major event.
After major banks financing the company sold their credit claims to international financial investors in the second quarter of 2013, the company tried to win over the large number of creditors for a comprehensive refinancing plan. As the creditor representatives of the various capital levels (SynLoan I/LBBW loan and SynLoan II, convertible bond, hybrid) failed to agree even after several intense rounds of negotiations on a joint, comprehensive refinancing plan for the company or the bridge financing required to cover the liquidity required to implement a restructuring plan, the positive going concern forecast for the company could no longer be maintained following a detailed review and according to the ad hoc disclosure on 20 August 2013. The status of over-indebtedness subsequently calculated at liquidation values under insolvency law resulted in a shortage of cover for IVG Immobilien AG of EUR0.9 billion, so there was no expectation of settling the liabilities from liquidation proceeds. Accordingly, the company filed for insolvency due to over-indebtedness on the basis of failed refinancing negotiations.
 
The corresponding application by the company's Board of Management for the initiation of protective shield proceedings with the goal of sustainable self-administered restructuring in accordance with Section 270b InsO of 20 August 2013 was approved by the Bonn District Court on 21 August 2013. The Dusseldorf lawyer Horst Piepenburg was appointed trustee. The application related exclusively to the parent company of the IVG Group, IVG Immobilien AG based in Bonn. The operating subsidiaries of IVG Immobilien AG were not affected by the insolvency application. The implementation of the insolvency proceedings under self-administration was confirmed by the court on 1 November 2013.

Since the initiation of the protective shield proceedings, the company has focused in particular on creating an insolvency plan to restructure the company financially as part of plan proceedings and to reduce indebtedness to a normal debt ratio for the market. At the core of the financial restructuring as part of the insolvency proceedings is the exchange of receivables from the company for shares in the company in the context of a non-cash capital increase ('debt-equity swap'). Creditors and shareholders approved the insolvency plan on 20 March 2014.

In addition, the company's Board of Management initiated the operational restructuring with the objective of optimising the Group's corporate and cost structure. The initiated operational restructuring also included the discontinuation of business activities at IVG Private Funds GmbH due to the division's lack of long-term profitability.

In ad hoc disclosures on 10 and 12 August 2013, the Board of Management announced that on 30 June 2013 the strategic review of all business areas and their carrying amounts - announced in the company's ad hoc disclosures of 12 and 19 July 2013 - resulted in a significant nine-figure impairment requirement. This amount was based on impairment in various areas, notably valuation adjustments in the property segment, in the caverns business and in equity investments and receivables. At the same time, the Board of Management accordingly announced the loss of more than half the share capital of the company (Section 92 (1) of the German Stock Corporation Act).

In addition, the following events also influenced the company's net assets, financial position and results of operations in the third quarter of 2013:
- IVG Real Estate segment: A total of four (partial) sales with proceeds of around EUR25 million were realised in the third quarter of 2013. This provided the company with free liquidity in the tens of millions.
- IVG Caverns segment: Although a seven-year lease was successfully concluded for an IVG-owned 150,000 cbm oil cavern in July 2013, the generally weak demand for long-term leases to store oil and gas in the     caverns business otherwise persisted.

The overall economic situation, and especially the environment for office properties, developed stably in the third quarter of 2013. The transaction volume in the German commercial property sector did not change compared to the previous quarter at around EUR6 billion.

Due to the initiation of self-administered insolvency proceedings on 1 November 2013, the company is currently compiling consolidated financial statements as of 31 October 2013 (short financial year), which will provide further information on the company's financial situation that will also relate to the third quarter of 2013.

Bonn, 17 July 2014

The Board of Management



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Language:     English
Company:      IVG Immobilien AG
              Zanderstr. 5-7
              53177 Bonn
              Germany
Internet:     www.ivg.de
 
End of Announcement DGAP News-Service  

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