IVG Core 0173 AG / Release of an announcement according to Article 37x of the WpHG [the German Securities Trading Act]
28.07.2014 09:28

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 Management REIT-AG (today: IVG 0173 Core AG): Interim report on Q1 2013/2014 (1 July 2013 - 30 September 2013)
Interim report in accordance with section 37x of the German Securities Trading Act (WpHG)

On 1 August 2013 the company (ISIN: DE000A0TGPS5) reported that IVG Immobilien AG (ISIN: DE0006205701) directly or indirectly held a total of 94% of shares in the company on 1 August 2013 as a result of several outstanding shareholders exercising put options. Given the low number of shareholders and the number of shares remaining in free float, the company reported that it was therefore unable to rule out the possibility of IVG Immobilien Management REIT-AG's shares admission to trading on the Munich Stock Exchange being revoked at that time. After IVG Immobilien AG directly or indirectly assumed all shares as a result of further put options being exercised by the final outstanding shareholders, the Munich Stock Exchange announced on 21 February 2014 that Immobilien Management REIT-AG's admission to the Regulated Market would be revoked as at 21 March 2014 and that pricing would be suspended from this date. REIT status expired with the delisting. Retroactively to the start of the financial year, the company is therefore subject to corporation and trade tax and no longer benefits from the tax privileges of the German REIT Act.
The business performance of IVG Immobilien Management REIT-AG in the first quarter was influenced in particular by the significant event of the initiation of protective shield proceedings by IVG Immobilien AG (ISIN: DE0006205701) in accordance with section 270b of the German Insolvency Code (InsO). Given its relations with IVG Immobilien AG, there are considerable dependencies on the part of IVG Immobilien Management REIT-AG that, in the event of the regular insolvency of IVG Immobilien AG, could lead to significant and existential effects for the business activities and net assets, financial position and result of operations of IVG Immobilien Management REIT-AG. In addition to IVG Immobilien AG, the company is also a further borrower in SynLoan I tranche B in the amount of EUR 82 million, for which IVG Immobilien AG is jointly liable as the guarantor. This liability of the company is therefore a part of IVG Immobilien AG's insolvency plan.

A standstill agreement with the syndicate of banks financing IVG Immobilien Management REIT-AG's core portfolio was reached by way of letter dated 30 September 2013. Under this agreement, the repayment of EUR 5.0 million per quarter that IVG Immobilien AG is contractually required to finance will not be seriously demanded for the due dates of 30 September 2013 and 31 December 2013. The standstill period was extended several times and currently runs to 30 September 2014. Under the extensions, two of the four regular repayments were subsequently made in the period 30 September 2013 to 30 June 2013.

Given IVG Immobilien AG's influence on the net assets and financial position/results of operations of the company in the first quarter of 2013/2014, there now follows a brief explanation of the restructuring activities by IVG Immobilien AG:

After significant banks financing IVG Immobilien AG had sold their loan receivables to international financial investors in the second quarter of 2013, IVG Immobilien AG attempted to sway its many creditors for a comprehensive refinancing plan. As the creditor representatives of the various capital levels of IVG Immobilien AG (SynLoan I/LBBW loan and SynLoan II, convertible bond, hybrid) failed to agree a joint, comprehensive refinancing plan for IVG Immobilien AG, even after several intense rounds of negotiations, or the bridge financing necessary to cover the liquidity required to implement a restructuring plan, after a detailed review - and according to the ad hoc disclosure of 20 August 2013 - it was no longer possible to maintain the positive going concern forecast for IVG Immobilien AG. The status of over-indebtedness subsequently calculated at liquidation values under insolvency law resulted in a shortage of cover for IVG Immobilien AG of EUR 0.9 billion, with the result that it was not expected that its liabilities could be covered by the proceeds from liquidation. Accordingly, IVG Immobilien AG filed for insolvency owing to its over-indebtedness on the basis of failed refinancing negotiations.  
The corresponding application by IVG Immobilien AG'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 Düsseldorf lawyer Horst Piepenburg was appointed as the administrator. 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, IVG Immobilien AG has focused in particular on creating an insolvency plan to restructure IVG Immobilien AG financially as part of plan proceedings and to reduce indebtedness to a debt ratio normal for the market. At the heart of the financial restructuring as part of the insolvency proceedings is the exchange of receivables from IVG Immobilien AG for shares in IVG Immobilien AG as a non-cash capital increase (debt/equity swap). Creditors and shareholders approved the insolvency plan on 20 March 2014.
In ad hoc disclosures on 10 and 12 August 2013, the Board of Management of IVG Immobilien AG 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 losses in various areas, notably remeasurement in the property segment, in caverns business and in equity investments and receivables. An eight-figure amount of this related to IVG Immobilien Management REIT-AG.
Otherwise, the operating performance of IVG Immobilien Management REIT-AG was stable in the reporting period.

The development in the overall economic situation and the office property sector in particular was stable in the first quarter of 2013/2014 (1 July 2013 - 30 September 2013). The transaction volume in the German commercial property sector was unchanged quarter-on-quarter at around EUR 6 billion.
Bonn, 28 July 2014
The Board of Management



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Language:     English
Company:      IVG Core 0173 AG
              Zanderstraße 5-7
              53177 Bonn
              Germany
Internet:     www.ivg-reit.de
 
End of Announcement DGAP News-Service  

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