DGAP-Adhoc: IVG Immobilien AG: Development of a co

IVG Immobilien AG / Key word(s): Capital Reorganisation/Restructure of Company 12.07.2013 20:06 Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted by DGAP - a company of EQS Group AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- As announced on 31 May 2013, IVG Immobilien AG (IVG or Company) is currently conducting negotiations with principal shareholders, and all main creditors affiliated in 'Ad hoc-Committees' with regard to (i) a loan agreement in the amount of EUR 1,350 million dated 25 September 2007/13 April 2012 (SynLoan I), (ii) a loan agreement in the amount of EUR 1,047.4 million dated 12 May 2009/24 February 2012 (SynLoan II), (iii) the convertible bond (ISIN: DE000A0LNA87) and (iv) the hybrid bond (ISIN: DE000A0JQMH5) about the development and implementation of a comprehensive refinancing strategy. From the Company's perspective, the basis of the comprehensive refinancing concept, still to be agreed, will be the following: 1. The Business Plan Scenario for 2013 to 2018 (Business Plan Scenario) passed by the board of IVG: According to the Business Plan Scenario the board assumes that IVG Group will, medium term and continuously growing during the projection period, achieve an EBIT of solidly more than EUR 200 million per year due to a consistent focus on the strengths of IVG's business model as an integrated platform of investment and funds business for real estate and infrastructure (caverns) combined with i. a strategic focus and, if necessary to achieve return ratios well at market standard and in order to avoid negative effects on earnings in the future due to unrealised changes in value, a partial revaluation of the real estate portfolio including the sale of approx. 60 minor, non-strategic properties until 2016 (the THE SQUAIRE ensemble will presumably be transferred into IVG's investment portfolio) and increased, value-adding investments in IVG's real estate portfolio (as of 2015, approx. EUR 50 million annually), ii. the realisation of (already agreed) sales of caverns in the amount of approx. EUR 500 million and, depending on demand due to signed rental agreements, moderate new developments of additional caverns for IVG's portfolio until 2018 (probably one oil cavern and two gas caverns), iii. the expansion of the funds business primarily together with institutional and semi-institutional investors, aiming at a net growth of assets under management of approx. EUR 500 million to EUR 700 million p.a.; in particular, as of 2015, - based on successful co-investments in the past (Protect Fonds, Premium Green Fonds, IVG Kavernenfonds I/II, Silberturm) - approx. EUR 100 million per year shall be available for co-investments, which, with additional investors' resources, might result in additional assets under management of up to EUR 1,000 million per year, iv. additional cost savings and increased efficiency in the amount of approx. EUR 25 million per year. These projections in the Business Plan Scenario will probably need to be adjusted after the strategic review of all business divisions and their asset valuations as currently conducted by the Company as mentioned in the ad hoc announcement dated 31 May 2013. At present, the Company cannot rule out that (near-term) value adjustments might add up to an amount that requires a notice of loss of half of the Company's share capital (para. 92 sec. 1 German stock corporations act). 2. A preliminary indicative liquidity analysis: The analysis comes to the conclusion that - according to current projections and estimations, regarding, inter alia, the feasibility of specific liquidity optimisation measures, which might need to be adjusted in the future - an expected liquidity need of approx. EUR 120 million, not yet met and possibly posing a risk to the company as a going concern, might arise between October 2013 and March 2014. This is in particular attributable to (i) the shutdown of the automated zero-balancing cash pool as a measure of legal precaution in the light of the deteriorated overall situation of the group and (ii) the high costs related to the restructuring to be borne by the Company. Prior to the implementation of the comprehensive refinancing, the Company could receive a bridge loan, on which the Company is currently holding negotiations with creditors already invested. 3. An analysis of the estimated satisfaction quota of the different groups of creditors and the remaining liquidation proceeds for the shareholders in the event of IVG group's insolvency induced liquidation ('Entity Priority Model' - EPM) conducted by an international audit firm mandated by the Company: The EPM calculated that the satisfaction quota in specific liquidation scenarios of the IVG Group will presumably be - inter alia depending on (i) the level of legal enforceability of various securities granted to the individual creditors presumed in each liquidation scenario (ii) the estimated proceeds from the granted securities - (i) between approx. 46 to approx. 55 percent (SynLoan I), (ii) between approx. 86 to approx. 89 percent (SynLoan II), (iii) between approx. 27 to approx. 41 percent (convertible bond) and (iv) between approx. 96 to approx. 100 percent (Carve-out debt). The creditors of the hybrid bond and the shareholders of the Company will probably not receive any satisfaction in these scenarios. The calculated satisfaction quotas are based on credit volumes as per 31 December 2012. In so far, made/agreed repayments for the SynLoan II need to be taken into account. The aim of the Company remains to accomplish an agreement on a comprehensive restructuring concept short term, possibly supported by all main creditors and shareholders of the Company. Key issues of a consensual solution with major creditors should be agreed prior to sending out of the invitation to the annual general meeting of shareholders to the federal gazette, so they can be submitted to the vote of the shareholders in the annual general meeting 2013. 12.07.2013 DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: IVG Immobilien AG Zanderstr. 5-7 53177 Bonn Germany Phone: +49 (0)228 844-400 Fax: +49 (0)228 844-372 E-mail: ir@ivg.de Internet: www.ivg.de ISIN: DE0006205701, DE000A0JQMH5 WKN: 620570, A0JQMH Listed: Regulierter Markt in Berlin, Düsseldorf, Frankfurt (Prime Standard), München; Freiverkehr in Hamburg, Hannover, Stuttgart End of Announcement DGAP News-Service ---------------------------------------------------------------------------