ESPG AG launches restructuring project according to StaRUG due to impending insolvency

ESPG publishes half-year figures and launches restructuring project according to StaRUG

• Revenue increases to EUR 7.9 million (H1-2023: EUR 6.3 million)
• Net operating profit reaches EUR 3.5 million
• EBT of EUR -4.1 million negatively impacted by increased financing costs
• Management Board and Supervisory Board resolve to file a restructuring plan in pursuant to StaRUG
• Investors commit fresh liquidity of around EUR 9.5 million in the event of successful restructuring

Cologne, 10 September 2024: ESPG AG, a property company specialising in science parks, today published financial figures for the first half of 2024. The half-year figures confirm the continued robust development of the science park portfolio in a very challenging property market overall, while the increased financing costs are weighing on earnings and jeopardising ESPG AG's continued existence.

Revenue increased year-on-year to EUR 7.9 million (H1-2023: EUR 6.3 million). This growth is due in particular to successful lettings and inflation adjustments to existing rents. Net operating income reached EUR 3.5 million and thereof increased compared to the previous period H2-2023. Nevertheless, high financing costs, which were higher than in the first half of the previous year, had a negative impact of EUR -4.1 million on EBT. The options pursued to finance the interest payment on the 2018/2026 bond due on 1 October 2024 have not yet been successfully implemented and the Management Board is no longer pursuing them. The Company is therefore at risk of insolvency.

In order to continue the business plan for the further development of the Science Park portfolio and avert existential threats to ESPG AG, a restructuring plan will be filed with the competent local court in accordance with the German Act on the Stabilisation and Restructuring Framework for Companies (StaRUG). Property-holding subsidiaries and the operating business are not affected by this. The restructuring plan shall include a waiver of the creditors, primarily the bondholders, of all claims in return for appropriate compensation. A potential participation of the bondholders participating in the Company's future success will also be considered.

It is planned to submit the restructuring plan to the court in the short term with the objective that its provisions will take effect by the end of October 2024. The interest payment on the 2018/2026 bond due on 1 October 2024 will no longer be made.

Subject to certain conditions, in particular the legal effectiveness of the restructuring plan, investors have already pledged to provide fresh liquidity of around EUR 9.5 million to secure the Company's continued existence.

Frank Günther has been appointed General Representative and Chief Restructuring Officer of ESPG AG to support and implement the StaRUG process.

Frank Günther, Chief Restructuring Officer and Chief Representative of ESPG AG: ‘With over 25 years of experience in the restructuring of financial liabilities and the successful implementation of more than 50 transactions, I am familiar with these situations. We are working intensively to secure the financial stability of ESPG AG quickly and sustainably. The StaRUG procedure is a very good instrument for this and has proven its worth many times over in the recent past. The Company's operational development confirms the positive outlook. The bondholders should also benefit from this. Nevertheless, further measures are necessary to sustainably improve the financial situation of ESPG AG and strengthen the Company in the long term. I am convinced that we will quickly find a good solution in the interests of all stakeholders.’

ESPG will inform the capital market and the public about the progress of the restructuring measures and the further course of the process in accordance with legal requirements. The aim is to stabilise the Company's financial situation in the long term and to reach an agreement with the creditors, in particular the bondholders.

About ESPG
The European Science Park Group (ESPG) is a real estate company specialising in science parks. The Company’s focus is on the development of science parks, predominantly characterised by tenants from future-oriented sectors such as life sciences, green technologies or digital transformation, which benefit from their proximity to each other and their direct proximity to universities, hospitals or research locations. ESPG’s portfolio already comprises 16 science parks across Europe with a total area of 126,000 square metres. The sites are generally located outside metropolises, in areas that are considered science clusters or have a high concentration of innovative companies.

Press contact:
Jan Hutterer
T +49 40 60 91 86 83
M +49 172 3462831
espg@kirchhoff.de