Property magnate Cevdet Caner joins Aggregate as chief executive
Austrian investor also to acquire 20 per cent stake in struggling real estate group
Austrian property magnate Cevdet Caner has been named as chief executive of Aggregate Holdings, in a surprise move that will also see him take a 20 per cent stake in the company linked to allegations facing Adler, one of Germany’s biggest real estate groups.
Luxembourg-based Aggregate was once the largest shareholder in Adler, a real estate group that owns 27,500 flats in north and western Germany.
Adler has been under intense scrutiny since short-selling group Viceroy Research last year published a report accusing the group of widespread fraud and inappropriate related-party transactions connected to Aggregate and Caner. Caner, Adler and Aggregate have denied all the allegations.
A forensic audit by KPMG into the allegations commissioned by Adler found extensive evidence that Caner had significant involvement in strategic decisions and the recruitment of executives despite having no formal role at Adler.
The investigation also uncovered that Caner was paid €12.6mn for undocumented “advisory services” in two M&A transactions, while Adler also bought some of Aggregate’s bonds in an undisclosed transaction. Adler said that the KPMG investigation had found no evidence of fraud.
The appointment of Caner as CEO of Aggregate comes as rising interest rates deepen the challenges for the indebted group.
In a statement Caner said that he was “excited to lead the planning and implementation of the next stage of Aggregate’s strategy.”
Until the deal with Caner, Aggregate was entirely owned by its founder Günther Walcher. Aggregate, which remains a significant shareholder in Adler, did not provide any details of the transaction with Caner.
Caner, who presided over Germany’s second-largest property group bankruptcy when his Level One group failed in 2008, has so far been an adviser working “on a deal-by-deal basis on matters of sourcing, transactions and financing”, Aggregate said in a statement.
At the end of last year, Aggregate had €4.5bn of net debt, and its bonds are trading at around a third of their face value.
Walcher said on Monday that with “the major disruptions in global markets set to continue, there will be tremendous opportunities in the European real estate sector.”
Former Deutsche Bank executive Michael Cohrs, who headed the lender’s investment bank until 2010, and Luciano Gabriel, chair of PSP Swiss Property, will join a new advisory board that is designed to give Aggregate “constant access to world-class strategic advice.”
Shares in Adler have fallen by more than 80 per cent over the past 12 months, a slide accelerated after KPMG in February refused to sign off on the property developer’s accounts and in May ditched the group as a client.
Aggregate’s stake in Adler fell to 6.1 per cent in February after the remainder of its holding, which was pledged as collateral for a €250mn loan, was seized after it failed to service a margin call.
Adler chair Stefan Kirsten told Börsen-Zeitung in an interview last week that the wind down of the company was one option that was being explored.