Investors take Adler to court over plan to sell property unit assets
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Loading... - Gael Galban
- 13 Oct 2022
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The group has hired Munich law firm Martius to start litigation, which was filed with the Berlin Regional Court late last month, according to people familiar with the matter. The motion seeks to block Adler Group SA’s proposed sale of nearly 95% of Adler Real Estate’s residential and commercial units to a third party, the people said.
The move is the latest move by investors in Adler Real Estate, concerned that assets and cash are being moved beyond their reach. The group is seeking to repay 6.3 billion euros ($6.2 billion) in debt as the once-booming German property market shows signs of a turnaround.
The German owner has been thrust into the spotlight by allegations made by short seller Viceroy Research and a former associate of Cevdet Caner, the tycoon accused of pulling the strings of the business. Investors are worried about the owner’s financial situation, after large-scale asset sales and a forensic investigation into allegations of fraud failed to halt a slide in its stocks and bonds.
Adler has made a number of write-downs this year, including hundreds of millions of euros in receivables that Viceroy had flagged in the report, and also wrote down the value of its development arm Consus Real Estate AG.
Adler’s management said an investigation by KPMG found no evidence of “systematic fraudulent transactions and looting”. The forensic report was unable to refute some allegations regarding Caner’s involvement and agreements. KPMG has since resigned as auditor of Adler.
Adler declined to comment for this story, but has previously said he is engaged in constructive discussions with the majority of his bondholders, including a larger group of parent company creditors. Representatives for Martius did not respond to a request for comment.
Key unit
Adler Real Estate is the unit that led a three-way merger with Consus and ADO Properties to form Adler Group in 2020. The parent company now owns nearly 97% of its shares, while the unit has around 1.5 billion euros in debt, including €500 million in bonds maturing in April 2023. Read More...
