The CEO of German real estate company IVG Immobilien AG – the former joint owner of London’s Gherkin – has outlined plans to restore the firm’s capital market viability.
A key element in the management’s strategy involves hiving-off of a large proportion of the properties managed for the company’s own account to a new company.
Addressing shareholders at IVG Immobilien’s Annual General Meeting today, CEO Dietmar P. Binkowska (pictured), said: “Within our overall portfolio, we have identified a core portfolio with a value of around €3 billion with significant upside potential. We intend to move this prime cut of IVG Immobilien AG into a separate company.”
Binkowska explained that the new company would operate as a subsidiary of IVG Immobilien AG, and that the move would improve comparability with other market participants and simplify the possibilities of refinancing the property portfolio.
Ultimately, he continued, the strategy will enable the management to react quickly and flexibly to the opportunities and challenges of the market. He added that the preparatory work for the move had been underway for some time.
The AGM also addressed the financial years leading up to the insolvency proceedings in September 2014 following years of mounting debts. Shareholders approved of the actions of the Board of Management and Supervisory Board members working for the company during this period.
CFO Rolf Glessing said that, in addition to successful financial restructuring, the priority of IVG’s management during the period was to set the course of the future positioning of the company and its holdings.
He cited the disposal of the fund business for private investors and the establishment of institutional funds as independent business areas as key milestones on the road to recovery, along with the substantial reduction of debt achieved as part of the insolvency proceedings.
Subsequently, he continued, IVG has successfully completed a €1.9 billion refinancing package and the restructuring of the remaining debt on its balance sheet, enabling the company to look forward with confidence.
“We expect to generate a sound positive result in the current 2015 financial year,” Glessing concluded.
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