The German real estate group is on trial in London. Creditors want to see their money. The short-seller Fraser Perring sees fraud allegations confirmed. A group of investment funds wants to prevent the restructuring of the real estate group, which is in debt of around six billion euros.
The Adler Group is clutching at the last straw. It proposes extending the repayment period of some bonds due next year, making a new loan to the company possible, and temporarily suspending interest payments.
Holders of the Adler bonds, including several funds and DWS Group, an asset manager of Deutsche Bank, question the plan. They expect to give up much of their money in the restructuring. Adler‘s lawyers have stated that restructuring is the only alternative. Otherwise, insolvency proceedings would have to be initiated, with all lenders suffering losses.
The trial in London marks the preliminary culmination of numerous inglorious events. British short-seller Fraser Perring had made serious allegations against the real estate company in October 2021: “Adler Group is a hotbed of fraud, deception and financial misrepresentation aimed at concealing its true financial position, which is grim,” reads the report, which was published under the provocative title “Bond Villains.”
Fraser Perring is no stranger, he was instrumental in uncovering the Wirecard scandal, and early on warned the German financial regulator, which, instead of investigating the information, initiated proceedings against Perring. Since the short-seller published his report, Adler‘s share price has plummeted. Within a year, the share price has fallen by almost 93 percent.