November 11, 2024
Willkie advised DEMIRE Deutsche Mittelstand Real Estate AG, an investor in commercial real estate, on a comprehensive restructuring of its listed 2019/2024 German law bond of originally EUR 600m.
The restructuring was implemented on the basis of a consent solicitation process in accordance with the German Bond Act (Schuldverschreibungsgesetz). As part of the restructuring, the aggregate outstanding principal amount of the bond was reduced from approx. EUR 500m to approx. EUR 253m, resulting in a significant deleveraging of DEMIRE. The restructuring solution negotiated with an ad-hoc group of bondholders and DEMIRE's major shareholder included:
- A buyback of bonds from DEMIRE by way of a so-called unmodified reverse Dutch auction backstopped by the ad-hoc group and other significant bondholders.
- A partial redemption of the bond in the amount of approx. EUR 50m at nominal value.
- A shareholder contribution in the amount of close to EUR 100m.
- Collateralization of the bond, in particular by implementation of a so-called double LuxCo structure.
- A comprehensive amendment of the terms and conditions of the bond, including a prolongation of its term until the end of 2027.
The Willkie team was led by partner Dr. Jörn Kowalewski and counsel Dr. Jan-Philipp Praß, and included partners Joseph Marx, Cornelia Thaler and Jan Wilms as well as counsel Maximilian Mayer, Dr. Harry Nettlau and Wolfgang Münchow, and associates Dr. Axel Krohn, Christoph Schoppe, Martin Reichert, Dr. Philipp Steinhausen, Jan Reiter and Dr. Marc Dietrich.
Following the move of the restructuring team around Dr. Jörn Kowalewski from Latham & Watkins, Willkie continued to advise DEMIRE. Latham & Watkins is counsel to DEMIRE on capital market law issues.
A separate Willkie team led by Georg Linde and Dr. Wolfram Prusko has been advising DEMIRE's supervisory board since mid-2023 also in connection with the restructuring of the bond.
