Adler Group shareholders and bondholders have had a tough time since last summer, when short sellers began targeting the company.

Around 62 percent of the nominal value is currently being paid for the bonds of the real estate group on the stock exchange, and instead of 48 euros as in 2018, the share price is now just over 5 euros.

On Tuesday morning, the shareholders should have been shocked when the price fell by 10 percent again.

Martin Hock

Editor in Business.

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The trigger was the problems of one of the numerous companies that Adler has acquired in recent years.

Consus Real Estate, which claims to be the leading residential real estate developer in Germany's top 9 cities, announced that it must be assumed that a loss had occurred, which would result in negative equity on the balance sheet.

Write-downs would probably have to be made on investments and loans to affiliated companies.

The background is an increase in construction costs and a significantly lower expected project development volume.

The price of the few Consus shares that are still listed fell to 90 cents - a sad low for a share that was sold for 15 euros when it went public around five years ago.

Adler announced that they were "in principle ready to support measures to strengthen Consus' equity".

In a telephone conference, Stefan Kirsten, who has been in office since mid-February, said that no measures were ruled out.

A sale is only possible after healing.

The measures should not burden liquidity.

In April, Adler had written off almost the entire purchase price for Consus of around one billion euros.

According to Kirsten, Consus' liabilities to Adler add up to that amount.

It is assumed that the restructuring will be sufficient, said the head of the board of directors in a conference with analysts.

There will also be some personnel changes at Consus, the CFO is “not there anymore”.

Another problem child of the group is BCP.

There was also a gap in coverage, Kirsten said.

Here Adler wants to intervene with interim financing of up to 200 million euros.

The competitor LEG has a purchase option at the end of September, but is currently not ruling out letting it lapse.

When asked by the analysts whether there had been any interest from third parties in supporting BCP, Kirsten replied that being associated with the Adler Group is probably not the best calling card at the moment.

At least some banks have signaled that they want to wait and see whether a sale will come about.

Kirsten also gave an overview of how Adler intends to improve the processes and structure of the group, which have been criticized for being non-transparent and inadequate.

As of June, the auditor Thomas Echelmayer will become CFO on an interim basis.

Adler is also to be managed more as an economic unit in the future.

Advisors from PwC aim to improve compliance, with PJT performing a cash flow analysis and funding review.

An international law firm is to clarify legal claims against the company and its organs.

In view of the qualified audit of the 2021 financial statements, the Board of Directors does not consider it appropriate to pay a dividend for 2021.

Adler now wants to heal the restriction in order to be able to receive an unrestricted certificate for 2022.

The explanations were well received: the share price recovered and stabilized slightly in the plus.

But then came a big surprise: Kirsten had announced in the conferences that they would continue to work with KPMG as an auditor, but after the last telephone conference on Tuesday they surprisingly announced that they were no longer available for this purpose.

As a result, the share price fell again, by up to 13 percent to a new low of EUR 5.065 by the afternoon.

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