LUXEMBOURG (dpa-AFX) - The ailing real estate group Adler Group must resort to an alternative scenario for the planned change of bond conditions. Because some creditors had denied the company their consent to new conditions for a certain bond series at the end of 2022, Adler was thus unable to implement its original plan for all bonds. Instead, the group is now pursuing an "English restructuring plan" with the support of the required majority of creditors who had agreed to a postponement, Adler announced in Luxembourg on Thursday. Accordingly, the restructuring plan is to be filed in the United Kingdom.

To this end, Adler has reportedly established a British wholly-owned subsidiary, AGPS BondCo, which will be the principal debtor and new issuer of the bonds. At the same time, an irrevocable and unconditional guarantee will be issued in favor of the bondholders. Adler expects to be able to implement the proposed bond amendments with the support of the required majority of creditors once the restructuring plan has been initiated by the new issuer. The new bond terms are then expected to take effect in April 2023, according to the company.

Adler has been negotiating with its creditors for months. The company initially came under the scrutiny of the German Federal Financial Supervisory Authority in October 2021 following allegations by short-seller Fraser Perring, and is now also under pressure in light of rising interest rates and a high financing requirement. To this end, the company had thinned out its portfolio and sold properties in an effort to reduce its debt and keep its financing terms in the solid range.

Changing the terms of the bonds is also part of the reorganization plan. In November, the real estate company had already reached an agreement on this with important creditors such as the investment companies Pimco and Blackrock, and had also received a commitment for new debt capital of almost one billion euros.

However, Adler's goal of extending the maturities of the bonds, among other things, met with resistance from some investors. As a result, it failed to obtain the support of three-quarters of creditors required under German law. The plan caused displeasure above all among those investors who own the corporate bonds with the longest maturities. These are currently trading significantly cheaper on the bond market than, for example, the securities maturing in 2023 and next year.

However, according to Adler, 78 percent of bondholders have now turned out in support of the restructuring under English law. As part of the agreement, they are also to waive an audited annual financial statement until next year. This is because Adler still lacks a corresponding auditor. The auditing firm KPMG had rejected the appointment by a Berlin court for the 2022 financial year, as the company had already announced the previous evening.

KPMG had already refused Adler the audit certificate for 2021 - the Group had then published the figures without an audit certificate in the spring of last year in order, according to its own statements, to fulfill the reporting obligations in accordance with the terms of outstanding bonds. In 2021, the company had accumulated a bottom-line loss of just under €1.2 billion./tav/nas/jha/