FRANKFURT: German property company IVG Immobilien said it needs to cut its liabilities by up to ¤1.75bn ($2.27bn) as it struggles to refinance debts built up during an expansion spree.
The company said that the reduction was needed to bring “its loan-to-value ratio and its interest coverage ratio to a normal market level, thereby making it fit for the capital markets once again in the longer term”.
IVG, based in Bonn in western Germany, said in March it needed to completely restructure its almost ¤4bn in debt to make sure it has enough capital to refinance loans maturing this year and in 2014. It warned that it had come close to breaching covenants on its syndicated loans, which would mean banks could demand early repayment. Last month, the company was reported to be considering a debt-for-equity swap that would be costly for shareholders and junior debt holders.
Reuters
