Latham & Watkins Advised ACCENTRO Real Estate AG on Comprehensive Recapitalization Transaction Implemented via German Scheme (StaRUG)
The complex transaction resulted in a profound financial restructuring of the two senior secured notes issued by the company, the issuance of new super senior notes, a reorganization of the shareholder structure, and a reconstitution of the company's corporate governance. To implement this, the company conducted a procedure under the German Corporate Stabilization and Restructuring Act (StaRUG) at the Berlin (Charlottenburg) District Court. The company primarily negotiated the transaction with an ad-hoc group of noteholders who held a majority of the notes and provided new financing to the company in this context.
The company's senior notes were substantially reduced, and a significant portion of the liabilities was subordinated to a so-called qualified subordination, relieving the company. Additionally, major noteholders provided new capital to the company, for which super senior notes were issued. The company uses these funds, among other things, to repay certain bridge notes which were issued by the company and subscribed by the ad-hoc group to provide short-term financing to the company in recent months.
For the first time in Germany, the possibility was utilized to avoid a complete capital reduction to zero through a StaRUG restructuring plan. Despite the capital reduction, existing shareholders remain shareholders to a limited extent. A capital increase was carried out, excluding the subscription rights of existing shareholders. The approval of these shareholders for the restructuring plan was substituted by the decision of the restructuring court. Additionally, the existing supervisory board of the company was dismissed and replaced with a new supervisory board.
The successful completion of the recapitalization provides ACCENTRO Real Estate AG with the opportunity to benefit from a future recovery in the challenging market environment of the German real estate sector.
The Latham team was led by Frankfurt restructuring partner Daniel Splittgerber, with Hamburg partner Frank Grell, and associates Marcel Endrich, Jannik Geiter, and Leo Stelz. Advice was also provided on capital markets matters by Frankfurt partners Jan Penselin and Alexander Lentz, with counsel Camilla Kehler-Weiss, and associates Laura Neumann, Tobias Müller, and Alexandre Maturana; on corporate/M&A matters by Hamburg partner Dirk Kocher, with associate Steffen Augschill; on tax matters by Hamburg partner Tobias Klass, with counsel Daniel Hiemer; on litigation matters by Hamburg partner Stefan Patzer, with associate Marco Grotenrath; and on banking & private credit matters by associates Anna-Maria Kuckerz and Verena Birke.