Sample Transactions
Transaction for a banking consortium
Project name |
Service centre DD |
Client |
International banking consortium |
Duration |
8 months |
Topic |
Moderation |
Volume |
EUR 93 million |
Starting situation: Threatened insolvency of a SPV company as a subsidiary of a bank. Banking consortium (five banks) with non-recourse financing of € 100 million for project development. Single tenant with very good creditworthiness and contractual purchasing right.
Considerable construction defects to façade since second year of use. Lots of legal proceedings and complaints over several years with construction companies and manufacturers, corrective measures according to expert report approx. € 8-10 million. Tenant reduced rent by approx. 20%/year, resulting in no liquidity to service the debt, high risk of insolvency, subsequent extension agreement with banking consortium. Dispute between parties involved.
Task: Develop approach to resolve the situation, persuade owner and banking consortium of solution.
Solution: Negotiations with tenants on altered conditions and revocation of purchase right in return for compensation payment.
Parallel search for investor prepared to take risks for purchase of the property including risk of renovation costs, banking consortium not willing to provide supplementary financing, tenant’s purchase right could have leveraged economic viability.
Moderation and mediation by Brüggemann GmbH brought about a solution. Creative approach with economic compensation for tenant, established trust with the goal of staying in the building and discharging loans.
Search for and acquisition of investor willing to accept the risks arising from indeterminate renovation expenses. Purchase agreement concluded, tenant signed new rental contract.
Duration of solution process: 8 months