FRANKFURT May 7 German property company IVG
Immobilien is considering swapping part of its debt
for equity in a move to restructure its liabilities piled up in
a daring expansion spree, four people familiar with the
IVG had outstanding debt of almost 4 billion euros ($5.3
billion) at the end of 2012, and the company said in March that
it needs to completely restructure its debt to make sure it has
enough capital to refinance loans maturing this year and next.
One option would see holders of some syndicated loans being
offered new equity, while existing shareholders would be wiped
out almost completely, the people said.
Under the plan, IVG would also seek to reduce debt by about
800 million euros by almost entirely cancelling 400 million
euros each in convertible bonds and hybrid bonds, they said.
One of the sources said that according to the plan, which
IVG will likely present next month, holders of those securities
would be offered a very small equity stake. Another source said
that they may receive warrants, which would benefit them in any
future recovery at IVG.
The first source said at least 600 million euros in
syndicated loans were likely to be swapped for equity, while the
other three people said that it was too early to say how much of
IVG's outstanding loans would be swapped for equity.
IVG declined to comment.