* Company says needs funds of up to 120 mln euros
* Company says in talks on bridge financing
* Company says to revalue and sell certain assets, cut jobs
(Adds details on restructuring, CEO comment)
FRANKFURT, July 12 German property company IVG
Immobilien said on Friday a preliminary liquidity
analysis had shown that it may need funds of up to 120 million
euros (US$156.6 million) from October or the company's future
could be in doubt.
"An expected liquidity need of approximately 120 million
euros, not yet met and possibly posing a risk to the company as
a going concern, might arise between October 2013 and March
2014," the company said in a statement.
The company said it was currently in talks related to a
IVG, which has almost 4 billion euros in debt, said some of
the money needed was because of restructuring costs.
IVG built up debt during an expansion spree but some costly
projects then declined in value. It has said it needs to cut its
liabilities by up to 1.75 billion euros and completely
restructure its debt to make sure it has enough capital to
refinance loans maturing this year and in 2014.
The company, which manages assets worth 21 billion euros
including a stake in London's landmark Gherkin office building,
previously warned that it had come close to breaching covenants
on its syndicated loans, which would mean banks could demand
On Friday, it said that talks with creditors were ongoing
and that it was working on a joint plan that would satisfy
creditors and shareholders.
IVG said should it be forced to liquidate its assets, an
Entity Priority Model (EPM) analysis conducted by an audit firm
showed that creditors of a hybrid bond and shareholders would
leave empty handed.
"The EPM shows that only an agreement by all parties on a
joint concept would result in the most value for all
stakeholders," Chief Executive Wolfgang Schaefers said in a
Two sources familiar with the matter told Reuters that IVG
had a week to get all sides in agreement over the refinancing so
that it could hold its annual general meeting in accordance with
In May, the company was reported to be considering a
debt-for-equity swap that would be costly for shareholders and
junior debt holders.
IVG also set out a business plan that would entail property
and infrastructure sales and revaluations, as well as an
expansion of its funds business, job cuts and cost savings of
around 25 million euros a year until 2018.
IVG reported a 100 million euro net loss last year and
skipped paying a dividend. It also deferred coupon payments on a
It said on Friday that the restructuring plan should result
in annual earnings before interest and tax of well over 200
($1 = 0.7661 euros)
(Reporting by Victoria Bryan; Additional reporting by Alexander
Huebner and Kathrin Jones; Editing by Toni Reinhold)