Latham & Watkins Facilitates Comprehensive Recapitalization of ACCENTRO Real Estate AG
Latham & Watkins, a leading international law firm, recently advised ACCENTRO Real Estate AG on a comprehensive recapitalization that significantly reshaped the company’s financial structure. The transaction was a multifaceted process involving the restructuring of senior secured notes, the issuance of new super senior notes, a reorganization of the shareholder structure, and a reconstitution of corporate governance. To execute this, the company utilized 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. This negotiation led to a substantial reduction in the company’s senior notes, with a significant portion of the liabilities being subordinated to a so-called qualified subordination. This subordination relieved the company of a considerable financial burden. Additionally, major noteholders injected new capital into the company, for which super senior notes were issued. These funds were used, among other things, to repay certain bridge notes that were issued by the company and subscribed by the ad-hoc group to provide short-term financing in recent months.
One of the notable aspects of this transaction was the first-time utilization in Germany of the possibility to avoid a complete capital reduction to zero through a StaRUG restructuring plan. Despite the capital reduction, existing shareholders retained a limited extent of their ownership. A capital increase was conducted, 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. Furthermore, the existing supervisory board was dismissed and replaced with a new supervisory board.
The successful completion of this recapitalization provides ACCENTRO Real Estate AG with a solid foundation to navigate the challenging market environment of the German real estate sector. It positions the company to benefit from a potential market recovery, enhancing its financial stability and operational flexibility.
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. The team also received advice on capital markets matters from Frankfurt partners Jan Penselin and Alexander Lentz, along with counsel Camilla Kehler-Weiss, and associates Laura Neumann, Tobias Müller, and Alexandre Maturana. Corporate/M&A matters were handled by Hamburg partner Dirk Kocher, with associate Steffen Augschill. Tax matters were addressed by Hamburg partner Tobias Klass, with counsel Daniel Hiemer. Litigation matters were managed by Hamburg partner Stefan Patzer, with associate Marco Grotenrath. Finally, banking & private credit matters were handled by associates Anna-Maria Kuckerz and Verena Birke.
This comprehensive restructuring not only strengthens ACCENTRO Real Estate AG’s financial position but also sets a precedent for similar transactions in the German real estate sector. The involvement of Latham & Watkins underscores the firm’s expertise in complex financial restructurings and its commitment to delivering strategic legal solutions.
