Adler Group SA has received approval from a London judge to restructure debt amounting to 6 billion euros, despite opposition from creditors – including DWS Group.
The ruling allows the struggling housing group to extend the maturity of bonds due next year, take out new loans of more than 900 million euros and temporarily suspend interest payments. According to Adler's lawyers, a rejection of the debt restructuring would inevitably have led to a default this month and bankruptcy.
With the decision, the judge ended the attempts of a group of holders of long-term bonds to block the debt restructuring. The investors – in addition to DWS, Carval Investors, Strategic Value Partners and Attestor Capital – mainly hold Adler's bonds due in 2029. They argue that the plan primarily benefits shareholders and holders of shorter-dated bonds.
Full verdict in the next few days
Adler's shares rose as much as 15 percent after the decision in Frankfurt, but then fell back again. Adler Real Estate's bonds due in 2026 rose by 1.5 cents to 74.5 cents per euro, the biggest increase in more than two months.
The lawyers of the bondholder group asked the London judge for permission to appeal. A full verdict with reasons will be published in the coming days.
The holders of bonds with a later maturity "grant loans to the group to facilitate the repayment of debts with earlier maturities," said the lawyers of the opposition creditor group. "This is unfair and outrageous treatment."
The debt restructuring under British law is already Adler's second attempt. In Germany, the company failed because it failed to obtain the required 75 percent approval in every class of bondholders.