The share price of the ailing Adler Group shot up on Monday after the real estate company announced an agreement with major creditors on financing of more than 900 million euros after the market closed at the end of last week.
The fresh money is tied to tough conditions, but Adler is also demanding a lot from its investors as part of the solution that has now been found - such as an extension of the deadline for submitting an audited balance sheet.
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The shareholders see the step as a sign of hope, which caused the price of the Adler Group to rise by up to 65 percent to a peak of EUR 2.92 on Monday.
However, even these are ultimately only small movements compared to the around 20 euros that an Adler share was worth before the "short seller" attack last year.
The shares of the subsidiary Adler Real Estate also gained significantly on Monday.
However, due to the small amount of free float, they do not play as important a role as the parent company's share certificates.
The agreement with the creditors not only provides the Adler Group with fresh money, but also significantly reduces the time pressure to present an audited balance sheet for 2022.
The terms of bonds issued by the Adler Group with a volume of around 4.4 billion euros actually require audited annual financial statements by April 30 at the latest.
Instead, key Adler creditors are now granting the company a grace period until December 31, 2023. Had the April deadline been broken, creditors could have reclaimed billions.
This horror scenario had become more and more likely because Adler had fallen out with the auditor KPMG, who had previously been commissioned by the company.
After a dispute about missing information, KPMG did not want to certify the balance sheet for 2021 and was no longer willing to audit the annual financial statements for 2022.
The complexity of the case makes the search difficult
During a conference call on Friday for the cleansing of creditors, Adler's chairman of the board, Stefan Kirsten, commented, among other things, on the unsuccessful search for an auditor.
Accordingly, due to the complexity of the company, only large auditing companies can be considered for the audit of Adler's annual financial statements.
But none of them wanted to accept the audit assignment.
At the beginning of November, Adler again made an urgent request to the previous examiner, but this was unsuccessful.
According to Kirsten, at the end of last week Adler applied to the Berlin district court to have an auditor appointed by the court for the Adler Real Estate subsidiary.
This way is intended as a legal emergency solution for companies that are subject to audits and cannot find an auditor on the free market.
Kirsten hopes that the court-appointed auditor will also audit parent company Adler Group.
"In the event of a court order, we are ready to make far-reaching concessions and have done extensive preparatory work," Kirsten said, according to a transcript of the conference call on Friday.
There has been considerable doubt about the Adler Group's balance sheets since professional speculator Fraser Perring accused the company of being under the influence of power brokers who are said to have engineered transactions to the detriment of shareholders and manipulated key balance sheet ratios.
Even a special forensic investigation commissioned by Adler could not completely dispel the allegations in the eyes of the investors.
Instead, the special investigation also caused disagreements with the auditors from KPMG.
The financial services regulator Bafin is also examining the Adler balance sheets and, in November, as part of its balance sheet control procedure, found serious errors in the accounts for the second time.
To the new auditor, whoever it will be