Property group IVG's shares jump on prospects for debt deal

LONDON Wed Aug 7, 2013 7:26am EDT

LONDON Aug 7 (Reuters) - Shares in German property company IVG rose by almost a third on Wednesday following talks with creditors that could lead to a last-minute debt deal for the group.

IVG, which runs a fund that co-owns London's landmark Gherkin tower, had failed to strike a deal last week to restructure some 4.2 billion euros ($5.59 billion) of debt. But last-ditch talks with creditors about a debt-for-equity swap have taken place and an agreement is now on the horizon though not guaranteed, two sources close to the talks told Reuters.

"At the last second, an agreement has turned up as within the realm of possibility," one of the sources said.

The firm's Chief Executive Wolfgang Schaefers has said he would seek creditor protection to buy breathing room if no deal was achieved.

A number of buy-out fund operators including Apollo and TPG Capital have bought debt in the Bonn-based company to gain a negotiating position in talks and potentially take control of the company via a debt-for-equity swap.

No single company amassed a large enough stake to take control on its own and the large number of creditors has complicated the task.

IVG built up debts during its rapid expansion.

Its shares were up 31 percent at 0.047 euros at 1024 GMT, after plunging 92 percent this year against the backdrop of the debt restructuring talks.

IVG declined to comment.

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