The share price of the real estate company Corestate fell by 60 percent on Monday morning.

After months of speculation about a possible bankruptcy, the corresponding application seems almost impossible to avoid.

Late on Friday, the company's board of directors announced that, based on the information received that day, it no longer considered the success of the ongoing restructuring talks to be "predominantly likely".

The conclusion reached was that the restructuring negotiations with key bondholders can no longer be brought to a successful conclusion with the necessary probability.

Martin Hock

Editor in Business.

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The convertible bond is expected to be due for repayment on November 28, 2022, and an obligation to file for insolvency will therefore be examined.

Such an application for insolvency would be filed within the statutory period of one month.

The slump on Monday is not very meaningful in that it had already lost 99 percent from its peak in September 2017.

At the latest after the departure of founder Ralph Winter at the end of 2019, things became uneasy about the rapidly growing real estate company.

There had been frequent changes in the board of directors before.

A veritable exodus from the committees at the end of 2020 caused a loss of trust.

After three major shareholders had sold a large part of their shares and Vestigo Immobilien, a new main investor, came on board, the entire supervisory board resigned over a weekend.

Previously, the company, which was still listed in the S-Dax small-cap index at the time, had appointed Klaus Schmitt as a new CEO for three years, but he was not.

Instead, René Parmantier, long-standing CEO of the securities trading bank Oddo Seydler, only stayed until the summer of this year.

Last week, Corestate then published extremely weak figures for the first nine months of the current year.

Group sales had shrunk by more than two thirds to just under 50 million euros.

Above all, the gloomy general economic conditions and rising inflation and interest rates have caused a significant slump in income from structuring and financing advice since the spring.

The group made a loss of 137 million euros on an adjusted basis, unadjusted of 582 million euros.

The main reasons for this were one-off expenses for risk provisions and value adjustments for bridge financing, performance fees and real estate projects.

Corestate wrote off the entire balance sheet goodwill of the subsidiary HFS.

Real estate assets under management fell from 20 to 17.3 billion euros.

At the end of September, net financial debt was EUR 556.4 million, and consolidated cash and cash equivalents were EUR 40.1 million.

The volume of the convertible bond, which is due at the end of the month, is 188 million euros.

Another bond with a volume of EUR 300 million will mature in April 2023.

Load Eagle Connections

A restructuring concept was originally supposed to be adopted at an extraordinary general meeting on November 22nd.

In addition, the company had invited the bondholders to the bondholders' meeting on November 28, 2022, in order to also decide on the restructuring concepts presented.

Connections to the controversial, ailing real estate group Adler Group contributed to the dramatic decline.

Vestigo founder Natig Ganiyev already maintains close ties to the Adler Group's environment.

The former CEO Parmantier then bought the real estate financier AFS from Adler's major shareholder Günther Walcher.

One of the most important debtors of HFS, which has now been completely written off, was the project developer Consus, in which Walcher temporarily held 57 percent and which was merged into the Adler Group at the end of 2020.