Menora Mivtachim, one of largest Israeli finance and insurance groups, acquired the “VBG” portfolio as part of a joint venture. The portfolio comprises four office properties in Berlin, Dresden, Ludwigsburg and Bergisch-Gladbach with approx. 45,000 sqm of space let under long term leases to the main tenant Verwaltungs-Berufsgenossenschaft (VBG), a public accident insurance institution.
The transaction, which forms the basis for a restructuring of the liabilities of the former sole proprietor, Redefine International, was performed with the support of Cushman & Wakefield (C&W) who advised Redefine International on the restructuring and identified the joint venture partner as part of a structured bidding process.
The portfolio was burdened with liabilities amounting to € 117.3 million, which were securitised in 2007 in the form of commercial mortgage-backed securities (CMBS). Martin Braun, head of the Capital Markets Group of C&W Germany, explains: "We are increasingly seeing CMBS-collateralised credit agreements expire, for which innovative methods of resolution such as this one are required. The approach devised here represents a win-win situation for all involved in the process."
As part of the restructuring, Redefine International sold a nominal amount of 49% of shares of the holding company to Menora Mivtachim and a further 2% to a private investor and increased its equity base. The investor consortium acquired DG Hyp as a new equity provider. At the same time, Redefine International and the newly formed consortium negotiated with the credit administrator and creditor special servicers regarding details of the credit restructuring and the disposal of the portfolio.
After completing a purchase agreement, the properties were sold to new property company subsidiaries for a net amount of some € 80 million Euros. The proceeds from the sale enabled the restructured CMBS financing to be repaid.