DLA Piper achieves landmark success in Fürst Group's restructuring plan
DLA Piper guides Project Lietsenburger Straße Holdco Sarl through first successful Part 26A restructuring plan for German real estate
On March 7, 2024, DLA Piper celebrated a significant milestone, providing advisory services to Project Lietsenburger Straße Holdco Sarl ("Holdco") for the successful completion of its groundbreaking Part 26A restructuring plan ("Plan"). This achievement marks the first-ever successful use of the flexible Part 26A restructuring plan process for a German real estate development asset, involving the restructuring of over EUR1 billion of German law governed debt instruments.
The Fürst project, a colossal mixed-use development in Berlin acquired by Aggregate Holdings in 2021, stands as one of Europe's largest development sites. Following escalating financial distress and cost overruns, exacerbated by rising borrowing costs and lower property valuations, Holdco initiated the Plan to secure the project's future.
The Plan, approved by an overwhelming 97.3% of its senior creditors, brings several benefits to Holdco and the Fürst Group, allowing them to resume the project development on Berlin's prime Kurfürstendamm boulevard:
- Entry into a new EUR190 million super senior new money facility, supported by existing and largest financial creditors.
- Extension of financial debt maturities to at least November 2025, with flexibility for additional extensions.
- Access to retained cash (over EUR100 million) previously trapped and unavailable since August 2023.
- Majority of Fürst Group's shares placed into fresh ownership with neutral shareholders.
- Stabilisation of Holdco and Fürst Group's balance sheet through debt cancellations.
DLA Piper's team, led by partner David Manson, played a crucial role in facilitating this complex cross-border restructuring transaction. Manson, a specialist in restructuring plans and co-chair of DLA Piper's special situations practice, expressed delight in supporting the Fürst Group, emphasising the positive outcome as a testament to the Super Scheme process's flexibility in enhancing value for all stakeholders involved.