UK court approves German property group Adler's restructuring plan

LONDON (Reuters) -Adler Group SA's restructuring plan to prevent the German property company's imminent collapse was approved by London's High Court on Wednesday, despite opposition from some bondholders.

Judge Thomas Leech authorised the plan following a hearing last week when lawyers representing Adler's English subsidiary said the group was likely to enter insolvency proceedings at the end of April unless it was approved.

He told a short hearing on Wednesday that he would provide his reasons for allowing the plan at a later date.

Lawyers representing creditors who opposed it said they would apply for permission to appeal against the decision.

Adler, one of Germany's biggest landlords, is fighting a liquidity crisis triggered by a downturn in the German property market, rising energy and building prices caused by Russia's invasion of Ukraine and the impact of the COVID-19 pandemic.

In addition, short seller Viceroy Research in 2021 alleged the company's balance sheet had been artificially inflated, accusations Adler rejected at the time.

Lawyers representing Adler's English subsidiary AGPS Bondco told the High Court last week that Adler Real Estate AG would be unable to pay a 500 million-euro debt due later this month.

Adler Group has external debts of approximately 6.1 billion euros ($6.66 billion), according to court documents filed by AGPS Bondco for last week's hearing.

Under the restructuring plan, the company will borrow 938 million euros of new funding and the terms of unsecured notes that mature between 2024 and 2029 will be amended.

A group of creditors that holds notes that mature in 2029 – including investment firms DWS Investment GmbH and Strategic Value Partners – opposed the plan, saying they would be better off if Adler Group were formally liquidated.

Adler Group's share price – which has fallen by 97% since January 2021 – rose 19% by 1045 GMT.

(Reporting by Sam Tobin; editing by Paul Sandle and Barbara Lewis)