Adler Group SA sold a portfolio of apartments and co-living units in Berlin and plans to raise expensive new debt as the embattled landlord continues to shore up its finances.
The Berlin deal includes about 700 apartments and 200 co-living spaces that it sold to an unidentified purchaser, for net proceeds of about €130 million , according to a statement Monday. The price was broadly in line with the valuation as of June, when Adler marked down its real estate portfolio.
Separately, Adler is planning to borrow up to €191 million from investors at a 21% interest rate to help it repurchase outstanding convertible debt, according to people familiar with the matter. The actions are the latest twists as the group looks to reduce its relative indebtedness and raise new funds to pay back the rescue financing it agreed with creditors earlier this year. The company last week announced the sale of a Berlin development project and the disposal of a portfolio in Mannheim which it exited at a 10% discount to the last valuation.
The new debt Adler is seeking is a two-year so called payment-in-kind bond that will sit senior to all of the Adler debt excluding the new super senior debt that was signed late last year, the people with knowledge of the plan said. Berenberg Bank is acting as the sole lead arranger, the people said, asking for anonymity discussing internal information.
The planned bond sale is set to close in the coming weeks and comes as Adler seeks to repurchase €165 million of convertible bonds. Those bonds otherwise could be converted into equity at €53.1589 per share, compared with a current share price of €0.593, making it a challenge for the company when the debt matures in November.
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