Heuking advises The Grounds Real Estate Development AG on strategic investment by H.I.G. Realty Partners

With a team led by Dr. Thorsten Kuthe, Partner at the Cologne office, and Michael Neises, Partner at the Frankfurt office, Heuking advised The Grounds Real Estate Development AG on a strategic investment by H.I.G. Realty Partners. In an initial step, H.I.G. Realty Partners, a member of H.I.G. Capital group, subscribed in full to a complex bond issued by The Grounds. The selected financing structure enables The Grounds to rapidly advance its current real estate projects even though the current environment for real estate transactions proves challenging. In addition, the management board and the supervisory board of The Grounds are considering the idea to propose a capital increase of between EUR 40 million and EUR 75 million to the company’s annual general meeting. The current major shareholders, who together hold 73% of the company’s share capital, have already agreed to transfer their subscription rights to H.I.G. and to consent to the capital increase in such a scenario. In case H.I.G. decides to exercise its option, the proceeds from the issue of subscription rights will be used for the further expansion of The Grounds. As another pillar of its future funding structure, The Grounds intends to extend the term of its 2021/2024 convertible bond, subject to modified terms and conditions. To this end, The Grounds will convene a meeting of bondholders and propose to them to extend the term of the convertible bond, to adjust the interest rate, to suspend the change of control process for the entry of H.I.G., and to cancel the existing conversion rights.

The Grounds group specializes in German residential projects in major metropolitan areas and holds a steadily growing residential portfolio in its fixed assets. Headquartered in Berlin, The Grounds Real Estate Development AG is listed on the upper free market segment of Düsseldorf Stock Exchange’s primary market (ISIN: DE000A2GSVV5).

The Heuking team comprehensively advises The Grounds Real Estate Development AG on all of the aforementioned measures.

Counsel to The Grounds Real Estate Development AG
Heuking Kühn Lüer Wojtek:
Dr. Thorsten Kuthe (Global Lead, Capital Markets), Cologne,
Michael Neises (Finance, Co-Lead Bond Finance), Frankfurt,
Dr. Kai Erhardt (Finance), Hamburg,
Dr. Christoph F. Wetzler,
Christian Staps,
Anja Harms (all Finance), all Frankfurt,
Dr. Philip Jansen (Corporate/M&A),
Meike Dresler-Lenz,
Meike Daniels (both Capital Markets), all Cologne,
Dr. Fabian Bürk, LL.M. (Reorganization), Munich