UK court approves German property group Adler's restructuring plan

UK court approves German property group Adler's restructuring plan

States the reasons for allowing the plan would be provided at a later date

The UK’s High Court Judge Thomas Leech has authorized the restructuring plan of the Adler Group SA to prevent the German property company's imminent collapse.

The move followed a recent hearing wherein lawyers representing Adler Group's English subsidiary AGPS Bondco said the group was likely to enter insolvency proceedings at the end of April.

The lawyers representing the creditors who opposed it said they would apply for permission to appeal against the decision.

In 2021, the short seller Viceroy Research alleged the company's balance sheet was artificially inflated. However, Adler had then rejected the accusations.

Lawyers representing AGPS Bondco told the high court that Adler Real Estate AG would be unable to pay a 500 million-euro debt due later this month.

According to the court documents filed by AGPS Bondco, the Adler Group has external debts of approximately 6.1 billion euros ($6.66 billion).

Under the restructuring plan, the company will borrow 938 million euros of new funding and the terms of unsecured notes that mature between 2024 and 2029 will be amended.

A group of creditors who hold notes maturing in 2029, including investment firms DWS Investment GmbH and Strategic Value Partners, opposed the plan. They mentioned being in a better position if Adler Group was liquidated formally.

Adler, one of Germany's biggest real estate landlords, is fighting a liquidity crisis triggered by a downturn in the German property market. Additionally, the rising energy and building prices caused by Russia's invasion of Ukraine, and the Covid-19 pandemic has impacted it adversely.