(Bloomberg) -- Peach Property Group AG investors approved a stock offering to help the residential landlord deal with upcoming debt maturities, a sale that may be complicated by the fact that they also kicked the biggest shareholder off the board of directors.
The company plans to sell about 113.6 million Swiss francs ($134.6 million) of new shares through a rights offering by the end of October, according to a statement Friday. With Peach Property facing almost €600 million in debt coming due in 2025, the capital increase has been seen as key in negotiations with creditors over refinancing talks.
The stock sale, approved Friday at a shareholder meeting, is intended to “strengthen the group’s liquidity, reduce debt and finance upcoming investments in the portfolio,” Peach Property said.
However, the meeting also highlighted the divisions among Peach Property’s investors. Shareholders voted to remove John Ruane, co-head of European real estate at investment firm Ares Management Corp., and Annette Benner, a restructuring partner at law firm Greenberg Traurig, from the board.
Ares owns almost 30% of Peach Property, a stake it acquired through a convertible bond. Ares declined to comment.
Stock Gains
The proposal to remove the two directors came from H21 Macro Ltd., a firm that’s owned by Rainer-Marc Frey and is Peach Property’s second-largest shareholder. A person who answered the phone at Frey’s office said H21 declined to comment and then hung up.
Benner, the Greenberg Traurig lawyer, declined to comment. Peach Property has been contacted for comment.
Peach Property plans to sell 22.7 million shares at 5 francs each, a 46% discount to Thursday’s closing price. The stock rose 4.0% to 9.67 francs at 4:58 p.m. in Zurich.
Peach, which focuses largely on affordable housing around second-tier German cities such as Kaiserslautern and Dortmund, has seen its leverage metrics pressured by plunging property prices. It’s also faced a tradeoff between preserving cash and the need to invest in housing stock to drive down vacancy rates.
Shareholders also elected Urs Meister and Eric Assimakopoulos to the board until the annual meeting in 2025. H21 nominated Meister, a former fixed-income investment manager, while shareholders Zmex Corp. and Arquus Capital NV, controlled by Franciscus Zweegers, proposed Assimakopoulos, who is a property developer and investor.
Peach Property has a €300 million bond coming due in November 2025, which the company is aiming to extend by two or three years, Bloomberg previously reported.
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