By 
Shares of troubled German real estate company Adler surged in a relief rally on Monday after agreeing to a debt financing package with many of its top investors.
Adler
ADJ,
+52.08%
shares rocketed 55%, though the stock is still down 75% on the year.
Adler said bondholders with 45% of its debt agreed to push back the maturity date of a €400 million ($419 million) bond due in July 2024 by one year, in return for a 2.75% increase on the interest rate of the bonds. It’s also agreed to debt financing of up to €937.5 million at a 12.5% interest rate with an equity interest.
Adler pledged to hire a chief restructuring officer, and add one more board member with “extensive capital market expertise” to the owner and manager of 26,250 residential rental units across Germany.
“This averted a situation that threatened the Adler Group’s existence, since we are now – in this market situation – not under pressure to have to sell good assets well below their value and have also gained time to for the audit of the group,” said Stefan Kirsten, its chairman.
Kirsten said none of the large auditor companies wanted or were able to accept its mandate.
“For the past few weeks, Adler Group has been caught in the ‘perfect storm’ – no auditor, tight deadlines, poor markets, and dwindling liquidity. With the current developments, we can now determine our course more strongly ourselves again and have time to chart our route into the future,” Kirsten added.
Adler is appealing the finding of the German regulator BaFin that the 2019 financial statement of its Adler Real Estate
ADL,
+13.29%
unit contained accounting errors. Earlier this year, KPMG declined to sign off on its accounts, though it also did not confirm allegations of systemic fraud made by a short-selling firm.
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