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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good morning, everyone. My name is Gundolf Moritz, Head of Investor Relations for Adler Group S.A. So with me today are Stefan Kirsten, Chairman of the Board of Directors for Adler Group; Thierry Beaudemoulin, CEO and member of the Board of Adler Group; and Thomas Echelmeyer, CFO.
Stefan will start with a short introductory statement. And after that, Thierry and Thomas will guide you through the presentation today. After the presentation, we have reserved time for Q&A session, where Stefan, Thierry and Thomas will answer your questions.
As Timo said, the call will be recorded and made available on our website after the call. And as always, the last housekeeping remark, please read the disclaimer at the end of the presentation. And with this, I would like now to hand over to Stefan.
Thank you, Gundolf. Ladies and gentlemen, good morning. Before Thierry and Thomas will present our strategy update, the bondholder agreement and the Q3 numbers, allow me a few remarks.
Adler has, over the last month, been with the back to the wall, or as I said last week, caught in a perfect storm. We were unable to find an auditor, and it was not for a lack of trying. We were unable to sell assets, and you won't believe how many indecent proposals you get when the market perceives that you're in trouble, and we needed to oblige our debtors. So the clock was ticking. And here, not everybody pulls always into your direction. Under these circumstances, we initiated already in spring a comprehensive program to improve our governance, smaller Board, clear-cut responsibilities, gaps in management filled with seasoned professionals, high degree of people identity in the office of positions to allow a single economic unit to be run, analysis on legal claims for the sins of the past, analysis on compliance systems and obtain first-class external advice. We also started to protect our assets and cash position. The agreement with the bondholders is the best example. And we centralized and tightened our cash expenditures and limited it to the minimum necessary. We reached out to our stakeholders. We had a lot of shareholder contacts, not only calls like today, but also one-on-ones and meetings over the last month.
We had a bondholder group formation and discussion, which led to the bondholder agreement, which we presented last Friday. Especially, Thomas Echelmeyer had very detailed discussions with banks who are partnering with us. And we have intensified the communication also with local authorities with regard to the respective development projects and portfolios. And one of the most important tasks was to retain our people. I said before, Adler has good and dedicated teams. We improved the communication with them, especially by the management. We initiated retention programs. And we have a very low fluctuation number, which I think is a good sign. When you work in a company under the circumstances described, you have to be seriously frustration resistant. And we had a lot of frustrations with all sorts of partners, regulators, auditors, potential buyers, politicians and [indiscernible].
And this is now a very personal statement. I'm grateful and I'm humbled to work with the team that after each blow, simply got up again, brushed off the dust, went back to work over and over again. I'd like to thank them very much. And with that, I'd like to hand over to Thomas.
Thank you, Stefan. First of all, I would also like to thank everybody for joining us here today. After a lot of hard work and the continued dialogue between both the bondholders and our team, we are very glad to be able to announce that we have reached an agreement with the Steering Committee of bondholders.
Personally, I feel this is excellent news for all stakeholders, because this agreement provides stability to the group as it removes short-term pressure to dispose assets to fund upcoming maturities. And therefore, will allow us to focus on maximizing long-term value for all our stakeholders. The agreed terms are listed on the slide and were also included in our detailed announcement of the transaction, which we released last Friday. The new funding, which will be a little over EUR 900 million, is maturing on 30th of June 2025 and provides a runway for the group.
Following formal execution of the transaction, our bonds at Adler Group S.A. level will be secured, whilst there will be also changes to our governance structure, including the appointment of a new Board member and a Chief Restructuring Officer, who will join the management team.
The deadline by which audited financial statements for the 2022 year end should be provided, will be amended and extended until 31st of December 2023. All in all, and as said before, management considers this agreement as very good news for all stakeholders and provides us with the needed leading space to stabilize the group during the volatile times in financial and real estate markets.
We appreciate the efforts of the Steering Committee of the bondholders, and look forward to securing further support this week from those bondholders, who have not yet signed Lock-Up agreements to support the deal.
Now please join me to the procedural side on completing the transaction. As indicated in last Friday's announcement, we will shortly launch a constant solicitation procedure for the amendment of our [ 6 ] group SA bond. Bondholders, who are yet to Lock-Up, are invited to contact PJT for more detail, using the [indiscernible] on the bottom of this page. As for timing, there will be a fee of 1% for those existing bondholders who confirm their pro-rata allocation in the new money facilities by this Friday, second of December 2022. It will, however, be possible to confirm new money commitments until December 14, 2022.
The voting in the bond amendment consent solicitation is expected to occur by mid-December, with results anticipated by December 20. The transaction is expected to close in Q1 2023, following completion of IDW S6 opinion.
I would now like to hand you back to Thierry on Page 6.
Thank you, Thomas. Also from my side, I would like to thank everyone who is joining us here today on the call.
Earlier this year, we promised we would review the strategy of Adler Group and we will update all of you during the Q3 result presentation. As such, in addition going through our operational results and the agreement with bondholders, today, we will touch upon our new strategy. Please join me on Page 6, where I will run you through what is happening in the German residential market. What we see is a very much two-sided story. Solid fundamentals of the German residential market and investment market are sailing the perfect storm of high inflation and interest rate volatility.
On the one hand, we are experiencing strong operational performance and looking towards a positive outlook.
We are experiencing a healthy like-for-like rental growth of 2% in Q3. Occupancy continues to be at historical highs, 88.3% in Q3, underpinned by the ongoing housing shortage across Germany and in Berlin, in particular. Meanwhile, we continue to have a high collection rate of 98.3% year-to-date.
Positive macro driver allows us to be optimistic about our operational fundamentals. Germany has a fourth lowest unemployment rate in the EU at 3%, as well as the lowest youth unemployment rate of EU at 5.7%. The statutory minimum wage was increased to EUR 12 per hour starting October 1, supporting low-income group to cope with price inflation and increasing energy and utility bill.
On the other hand, the investment market is experiencing a complete transaction freeze. Resulting is the uncertainty surrounding property value.
The European residential market and the German market, in particular, are caught in a perfect storm of strong inflation and a reset of interest rate, increasing the need to find a new price equilibrium as rising interest rate no longer support the low-yield environment to which the market has become used to over the last years.
Investors are currently extremely cautious in underwriting the current market environment, resulting in a transition from fear of missing out over the previous years into fear of moving first. The majority of investors are in wait-and-see mode and refrained from engaging in transaction. They are afraid to catch a falling knife regardless of the size.
As a result, we are facing a dry investment market, with almost no sizable transaction having occurred since Q2. With limited visibility for sizable transaction in the short term, we expect it will take the market more time to establish a new price equilibrium.
As market circumstances are far from ideal to create liquidity by disposal and more time being required for market to stabilize, we are engaged with the majority of our bondholder to find common ground to steer the company in [ calmer ] water over the next 2.5 years.
Now please join me on Page 7, where I will guide you through the details of our disposal strategy over the years to come. As you are well aware, we have been exploring a number of disposals over the past month. It's fair to say that recent market momentum has put us going against the tide. Selling in the dry market with virtually no large buyer and plunging price expectation is simply not desirable.
In this context, this agreement with bondholder gives us more time and headroom and allow us to execute disposals in an orderly fashion without compromising sales price due to current unfavorable and volatile market conditions. Now we have identified 4 disposal blocks with which we intend to structurally decrease our leverage over the next year. Best block consists of BCP. After LEG decide to not exercise the call option, ADLER Real Estate is exploring the potential sale of its 63% stake in BCP.
The transaction is expected to be carried out as the sale of our share to an institutional investor. It is important to say that LEG has flagged its interest to cooperate with any institutional investor, and we are all trying to find a sensible institutional solution. We are considering the sale of a Berlin-focused yielding portfolio with a large privatization potential. It consists of 3,560 units and 420-unit commercial. The portfolio has been divided in 4 different sub-portfolios to maximize investor interest and associated sales profit.
NRW portfolio. It's a portfolio concentrated across Duisburg, Dusseldorf, Essen, Oberhausen and Dortmund, consisting of 6,790 residential units and 108 commercial units. It's higher yielding than the Berlin portfolio. We test the market in the past months. And the portfolio is to be reoffered to the market in the course of 2023.
Last part is development projects. A significant part of the development projects are being considered for disposal. We are assessing a potential disposal versus the retention of the asset, based on a project-by-project basis, with the premise of maximizing value.
Let's now move to Page 8. To finalize our strategic update, I would like to present you the 5 pillars around which our strategy, going forward, will evolve towards 2025.
Portfolio strategy. We envisage the transition to a pure-play Berlin residential estate company. We will execute orderly disposal of selected portfolio and selected development projects. Down the line, only selective development exposure will remain.
Asset management. We will finalize committed CapEx on development projects, with most of it falling in 2022 with a tail in 2023. No additional sizable CapEx commitment will be made. We will continue to work to obtain permit for land plots, allowing to explore sale with limited additional investment. We will execute targeted investment to upgrade the ESG profile of our portfolio towards 2030 post the stabilization phase.
Financing strategy. The agreement with the bondholder is providing sufficient headroom to stabilize the platform over the next years. We intend to reduce debt via orderly sales program. As part of the agreement with bondholder, Adler Group has the obligation not to pay any dividend to its shareholders.
Corporate strategy. We are working towards the simplification of the group corporate structure without listed subsidiary towards 2025. We will streamline internal operation in line with the higher concentration and the adjusted scale of the portfolio. We will decrease one-off overhead cost through a reduction of external and interim advisers. Corporate governance. On the auditor, we have launched an audit tender, which, unfortunately, did not yield any result. Although [ disappointing ], this came not as a complete surprise. At the moment, we continue dialogue with a number of parties, but we do not have a proposal.
In the midterm, we have officially filed for the application, requesting a court-appointed auditor with the Berlin Court.
As part of the bondholders agreement, we will propose another independent Board member with strong capital expertise to the next EGM/AGM and plan to appoint a Chief Restructuring Officer to senior management. Analysis of compliance framework by PwC has been concluded, minor gaps to state-of-the-art status to be closed.
Now let's move to our operational performance on Slide 10. Looking at our operational performance, we can say that Adler residential rental portfolio has had a good first 9 months of the year, supported by solid underlying rental fundamental.
The like-for-like rental growth in Q3 2022 has been 2% plus year-on-year, resulting in an average rent of EUR 7.56 per square meter per month. Vacancy decreased by 1.6% year-on-year and stood at 1.7% at the end of Q3. All of this reflects the high quality of our assets and our strong Berlin home base.
On valuation, we are starting to see the first effect of increasing interest rate, resulting in a minus 2.3% like-for-like decrease in value in Q3 compared to Q2. Despite this, value remains stable year-to-date.
Net rental income came in at EUR 187 million compared to EUR 259 million in Q3 2021. Funds from operations from rental activity totaled EUR 68 million compared to EUR 102 million in the same period of 2021. This corresponds to FFO per share of EUR 0.58.
Both NRI and FFO 1 were mainly impacted by the significant reduction in our yielding portfolio due to the completed disposal of 15,500 rental unit to [indiscernible] the sale of 14,400 rental unit to [indiscernible].
EPRA NTA at the end of September amounted to EUR 3.28 million or EUR 27.9 per share compared to EUR 3.53 million or EUR 30 per share at the end of June 2022. The LTV ratio of Adler Group went up by 1.9% to 59.9%. The LTV was affected over by the negative revaluation of our yielding portfolio and project disposal. Thomas will tell you more about this in a few slides.
Our EUR 615 million cash balance, EUR 792 million, including BCP, combined with EUR 937.5 million in bondholder commitment, puts us in a solid liquidity position to continue our operating activity as well as servicing our debt obligation under stabilized position. Meanwhile, our cost of debt continued to be stable at 2.2%, remaining at the same level as per end of [ Q2 ].
On the development activity, we have continued our efforts to strengthen our balance sheet and reduce our development exposure further. Ostend Quartier, LEA B and Neues Korallusviertel have been closed in Q3 2022, with total gross proceeds amounted to EUR 218 million. The sale of Eurohaus has been signed and proceeds amounted to EUR 37 million, with expected closing in Q1 2023.
In total, we have an additional EUR 320 million GAV in development projects, which are -- which -- where we have received offer of, are under LOI or exclusivity, including the projects Parkhaus, No.1 Mannheim, FourLiving VauVau and Grand Central in Dusseldorf.
I would like now to turn to Page 12. As a result of the significant disposal of part of our portfolio, the quality of our remaining portfolio continue to improve, with most of the assets being anchored in Berlin. Out of the 26,000 units in our portfolio, more than 18,000 are located in Berlin. This is excluding BCP.
This high quality of our portfolio is well reflected in the fair value per square meter. As per end of September, the average value of our standing portfolio stood at slightly below EUR 3,000 per square meter, well above the EUR 2,065 per square meter in [ Europe ].
Let's move on the next page. During this third quarter, we have experienced the first effect of the surge in interest rate and the shift in market sentiment, resulting in like-for-like fair value growth of minus 2.3% on a quarter-to-quarter basis. Compared to Q3 1 year ago, our yielding portfolio shows a value growth of 1.4%.
For Q4, the wider market anticipate negative revaluation, and we deem it likely that also our portfolio value will experience some additional pressure, although the magnitude remain uncertain at this point.
During the same period, vacancy stood at 1.7%, somewhat slightly above the 1.1% post end of December, following slight delay in the refurbishment process of vacant units. Nevertheless, this is significantly lower than a year ago when vacancy was 3.3%, representing minus 1.6% decrease year-on-year.
Moving to Page 14, you see that our residential rents are currently at EUR 7.56 per square meter per month on average, which is 14% higher than the EUR 6.61 per square meter a year ago, clearly driven by the disposal of a substantial part of our non-Berlin portfolio.
The 2% like-for-like rental growth year-on-year mainly resulted from 1.5% indexation and 0.5% formulating at market rent, combined with CapEx investment. It has remained a healthy mix between Berlin and other cities.
I would now like to hand over to Thomas, who will update you on our financial performance on Page 16.
Thanks, Thierry. At the end of the third quarter, we had a portfolio of circa EUR 5.3 billion worth of yielding assets, together with the development project that amounts to a GAV of approximately EUR 2.2 billion.
Given the fact that we anticipate the sale of the 63% stake in BCP, held by our subsidiary, ADLER Real Estate, we continue the classification of all of these assets and the associated liabilities as assets and liabilities held for sale. As such, our EUR 7.6 billion total GAV excludes BCP.
During the third quarter, we have sold the Ostend Quartier, Westend LEA B and Neues Korallusviertel development projects. Furthermore, the negative revaluation has been reflected in these numbers.
I would now like to move to the next page. The loan-to-value ratio of the group increased to 59.9% compared to 58% at the end of the second quarter.
This increase can be attributed to the negative revaluation of our yielding portfolio, as well as other general corporate purposes, including development, operational cash flow, CapEx, interest payments and project penalties, among others.
This is partially offset by the closing of Ostend Quartier, Westend LEA B and Neues Korallusviertel, which were completed during Q3 2022. Let's have a look at the maturity schedule on the next page. As you can see, our debt expiration calendar is back-end loaded, with only 3% and 15% of debt expirations in 2022 and 2023, respectively.
The majority of Q4 maturities have already been repaid, including the EUR 120 million convertible bond at Consus level, and an additional EUR 21 million of Consus debt. Remaining maturities for 2022 encompass at EUR 45 million secured facility at BCP level.
Upcoming 2023 maturities are covered through a combination of EUR 792 million cash on hand, including EUR 177 million at BCP as per Q3 2022, the recently announced bondholder agreement and active capital recycling measures, including portfolio and project disposals.
As part of the agreement with bondholders, the maturity of the EUR 400 million Adler Group bond maturing on July 2024 will be extended by 1 year. Furthermore, we intend to repay the EUR 500 million April 2023 ADLER Real Estate bond, and additional EUR 300 million maturities with the new commitments from bondholders.
Let's turn to Page 19. Our gross debt position at the end of the third quarter stood at just below EUR 7 billion. We continue to have a mostly unsecured financing structure with 64% of our total debt, with the remaining being secured bank debt, as well as a EUR 120 million convertible bond at Consus level, which was set to mature on 29th November and which has been repaid accordingly.
When it comes to the cost of debt, the remaining -- we remain at an average of 2.2%, with a fixed and hedged debt of 98.5%, with an average maturity of 3.5 years. The additional liquidity provided under the bondholder agreement will come with a different yield profile and carries a coupon of 12.5%, which would bring our average cost of debt to 3.5% on a pro forma basis.
Moving on to the covenant. We have already discussed in detail the LTV in the previous slide. So let's focus on the interest coverage ratio. Our ICR decreased to 0.4 below the debt incurrence covenant required level of 1.8x.
The main explanation for this is the lower EBITDA driven by the sale of our higher-yielding assets and the negative revaluation of our development pipeline in Q2, combined with the loss of strong EBITDA in Q3 2021, which is now not part of the ICR calculation. This has outweighed the improvements in net cash interest.
The unencumbered asset ratio decreased to 103% from 170% in the last quarter, below the 125% required level. This is mostly driven by the negative revaluation experienced this quarter. For the avoidance of doubt, these are incurrence-based covenants, which means that crossing the required level does not constitute an event of default.
Adler Group is technically restricted from debt incurrence while we are below the required levels. However, the agreement with bondholders permits us to refinance existing indebtedness.
Let's move now to Page 20. We ended the third quarter with a cash position of EUR 615 million, a step below the EUR 771 million at the end of the second quarter.
Please let me remind you that the EUR 615 million excludes EUR 177 million at cash held at BCP level, which is classified as assets held for sale at group level. With that, we would get to a position of EUR 792 million cash at hand per 30th of September 2022.
There have been three main factors affecting the cash flow in Q3. First, EUR 208 million of disposal proceeds, including Ostend Quartier, LEA B and Neues Korallusviertel.
Second, a negative financing cash flow of EUR 204 million. This includes, among others, a project debt repayment linked to Ostend Quartier and [ Benrather Gärten ], EUR 50 million, which was drawn by BCP under the intercompany loan, as well as interest payments, other smaller amortizations and repayments.
Third, lastly, we spent EUR 71 million in CapEx related to ongoing development projects at the Consus level. You can see that in this publication, we have included our anticipated cash development estimate until the end of 2024. We are very pleased to be able to show that our cash position will be positively impacted by the new funding provided by bondholders. Please note that the EUR 880 million is a figure net of fees. Linked to that, we will repay just over EUR 1 billion of debt until the end of 2024, as well as an anticipated EUR 187 million in cash interest.
On disposals, we have been very conservative and have not accounted for any portfolio sales other than the last closing proceeds for the East and North transactions. In our base assumptions reflected on this page, we only account for a total of EUR 101 million in disposal proceeds.
All in all, we expect to end 2024 at a cash position of around EUR 179 million, excluding the cash at BCP level as we classify BCP as an asset held for sale.
Thierry, back to you.
Thanks, Thomas. We would like to end this presentation with some concluding remarks.
Our NRI and FFO guidance have remained unchanged versus the previous quarter. The resulting NRI full-year guidance is therefore EUR 233 million to EUR 242 million, and the FFO 1 is EUR 84 million to EUR 86 million (sic) [ EUR 88 million ]. As part of the agreement with bondholders, Adler Group has the obligation not to pay any dividend to its shareholders.
To summarize, the bondholder agreement secured the stabilization of the group and provide EUR 937.5 million in additional liquidity commitment, paving the way for orderly disposal. The new strategy transition Adler into Berlin residential player with limited development exposure under a prudent financing structure and with a commitment to best practice in corporate governance.
We have had a strong personal performance in Q3 with a 2% like-for-like rent increase year-over-year. Operational vacancy of the total portfolio continued to get structurally low level at 1.7%. We have experienced a 2.3% like-for-like negative revaluation of the yielding asset portfolio in Q3 on the back of the surge in interest rate.
We have a solid liquidity position, including EUR 615 million cash at hand at the end of the quarter to be expanded with the liquidity package secured by the agreement with bondholders, therewith covering our funding needs until mid-2025.
With that, we would like to conclude the presentation and open the floor for questions. Thank you all for your attention. Gundolf, I hand over to you for the Q&A.
Yes. Thank you, Thierry, and I would like to hand over to Timo for opening the Q&A session. Before I do that, please be reminded that we have to limit the call for entirely 60-plus minutes since management is due to attend a townhall meeting to brief our employees. So Timo, over to you, please.
[Operator Instructions] The first question is from the line of Wolfgang Felix with Sarria.
Congratulations, first of all, on the deal. I think that's amazing news, and I think it looks good. If I may, just on your yielding assets these days, so you've taken down evaluation by 2.4% and 2% positive like-for-like. Can you roughly maybe run us through how you're doing that? And what inflation rates you're using as a base you took them up with that?
And then I have a few minor questions quickly on the deal, if I can. I'm sure there will be, hopefully, of general interest. The bondholders, the third lien available to bondholders voting in favor at [ ATJ ] level, will that be available to all bondholders or just to those voting in favor?
And the ADLER Real Estate bond collateral, that would be on also to the other real estate bonds, what kind of collateral will that be? Will that be part of the same collateral patents you are putting together for the entire firm? Or is it kind of real estate-specific separate collateral?
Yes. And then finally, the ADLER Real Estate [ '24 ], are you looking to pay them back immediately upon deal [ clutter ]? Or are they supposed to be remaining outstanding, but the new facilities would get drawn by another amount at their maturity?
So I will first cover the valuation of our yield portfolio. So [ CBRE ] has been instructed to conduct evaluation of our portfolio. Of course, on one hand, they have taken into account the positive development of the rent of 2%, which we expect to continue to increase at least at this level.
But nevertheless, given the surge in the interest rate, they have, of course, increased the cap rate. So that's a net effect of increasing cap rate, but still positive yield.
German residential is partly linked to inflation, because we have 20% of our contract, which are CPI indexed, but we have the majority of our index which are linked to [ Mietspiegel ], which capture partially inflation, but it's also a regulated tool on that.
So with the second part of your question with respect to the deal you asked for the third line and of the real estate level -- of the bonds at real estate level, the collateral, they are basically share pledges, and everybody gets it. So every bondholders at the AG level gets it, not only the bondholders who signed up the Lock-Up agreement.
Okay. On the valuation of the yielding assets, I guess, can you give us a bit of a framework on the Mietspiegel, and how we should think of the growth of rental income versus, I guess, inflation, going forward, versus what you can pass on in proportion and what you can't?
Where you can adjust to the last market condition and potential inflation is on your relating, because then you can change from, let's say, current rent, which could be EUR 5, EUR 6, EUR 7, where you can go up to the maximum of [ Mietspiegel ], which could go slightly below EUR 10. So that's a way to adjust your rent.
But inflation-wise, we have part of our contract, which are -- where we can capture inflation. But on the [ Mietspiegel ], it's a collection of market evidence. So if your relating rents are increasing, the [ Mietspiegel ] will increase, but this will be softening and smoother.
So the capture in inflation will happen, but you will have a lagging effect because [ Mietspiegel ] is always coming after the market, it is increasing, and you will capture slightly through relating. So in our calculation for next year, we are aiming around 2% rent increase, which is, of course, below inflation. But step by step, we'll work with all that over the next years.
Over how many years do you think -- how long do you think it's going to take for you to catch up with inflation?
We don't [indiscernible] with this one, yes. So we have a projection for next year.
The next question is from the line of [indiscernible] with [ P Square ].
I just had a quick question on -- it's actually from the presentation that you've released with the deal announcement. And when I look at the amount of -- when I'm looking at the cash flow bridge that you're doing at other group plus Consus level, it seems that you're saying that you're going to repay EUR 194 million of debt at the combination of Adler Group plus Consus.
And when I look at your -- the amount of debt that you have coming due in the short term, you had the $141 million of [ Consus ] that you've already repaid, right, and that would leave a gap of EUR 53 million to be repaid. But you still have about EUR 115 million of unsecured-level debt as Adler Group.
And so I'm just wondering, are you not fully repaying? Are you assuming that some of that debt has to roll over? Because obviously, that unsecured debt, it's quite hard to refinance in the current environment. So I'm just assuming, I'm just wondering, how you match those numbers?
So you refer to Page 18 of the presentation, I assume. So we have repaid the EUR 120 million convertible from -- at Consus level, as I mentioned in my speech as well. And we have repaid it today on time. And we paid EUR 21 million Consus debt during the course of the year. And the remaining amount is a repayment at the BCP level, which will be repaid as well [ all for long term ].
And so what are you assuming for the Adler Group debt? The Adler Group convertible bond and the remaining unsecured debt there, what are you assuming for the period of '22 to '24?
If I did get your question right, so what we are doing with the new money which comes in. So the first thing is we repay the 2023 bond at ADLER Real Estate AG, which is due in April 2023, the EUR 500 million. Then we repay as well the ADLER Real Estate bond, which is due in July 2024, the EUR 300 million, and we will extend the maturity of the EUR 400 million Adler Group bond, which will be extended by 1 year.
So that is basically for the bond situation, and the other is the secured bank debt, which will be repaid, especially when we prolonged with the existing banks.
Sorry, that was -- the answer -- my question is really specifically on the Adler Group convertible senior unsecured debt that is due in '23. That's the only maturity that I'm not seeing how you're directing, the [ EUR 102 million ]. The one that is due November 2023.
Give us a second to reconcile the number. This one will be refinanced during the course of 2023.
So you're assuming refinancing. Thank you so much.
[Operator Instructions] The next question is from the line of [indiscernible] with [indiscernible].
On the cash bridge on Page 20, just kind of just build on to the question that the previous person was asking. You have a debt repayment of 1034. And in Note 5, you're saying this is the refinincing of EUR 564 million of secured debt and EUR 190 million of unsecured debt. Can you please give me a breakdown of what exactly this debt is and when exactly is the maturity of these debts?
So we have to -- we ask you what maturity you are referring to? I didn't get the question. Which one -- on the Page 20, yes.
On Page 20, you have a debt repayment that -- under debt repayment, it relates to Note 5, where you say it assumes a refinancing of EUR 564 million of secured debt and EUR 190 million of unsecured debt. Can you please give me a breakdown of what this unsecured debt is and when exactly these maturities are due?
Yes. This is a range of different debt, which will be repaid, and there are smaller amortizations in as well.
So is it not possible to break it out by when the maturities are?
So currently, I do not have these kind of details here in this Q&A.
Right. Okay. And one other question from my side. For the deal, it's good news that you guys announced the deal. On the deal, I know you guys are going through the consent solicitation. I looked at the docs, and the threshold needed is 75%. But it also then refers to some alternative restructuring systems that could be used.
Is it possible for you guys to confirm what is the minimum threshold that is needed for this deal to pass? Is that 75%?
So let's start with the 75%. This is Stefan. Let's start with the 75%. What we have done is we have wall-crossed a group of 6 bondholders comprising of 45%. These were the 45% we referred to on Friday. So you know there is an early bird structure out there to catch up with at least 11 others who were comprising of the so-called [ Hengeler Groups ].
So this was the group of bondholders with which we were discussing, but who were not wall-crossed. And we are, of course, inviting others to come in. So this is the way how we believe that we would get to 75%.
If we -- and we will then announce a bondholder meeting. Keep in mind that the 75% threshold is only dependent on the people who attend the meeting. So if somebody doesn't attend the meeting, it also lowers our threshold with regard to the bonds.
If that one fails, we are having various routes to move forward, which, by the way, are detrimental actually to the rights of the bondholders because these are stabilization measures either under German law or under the non-German law.
There, we will easily come across with a 50% structure, maybe 2/3 in some cases, but definitely not 75%.
Why didn't we choose them in the first instance? We didn't chose them in the first instance, A, because we had very positive and constructive meetings for the bondholders, and we are not intending to restrict their rights at all. Is that answering your question?
Yes, that's very helpful. Just one other question from my side. You answered in response to a previous question that every bondholder is going to get the security. It's not only just for people who vote in favor of it.
So essentially, the difference on people who vote in favor of it and people who don't is mainly the coupon step-up and the PIK interest of it, right? Is there any other main difference?
No. The coupon uplift you will refer to, this is only for the Group SA bond, where we have an uplift of, what is it, 275 basis points. This is for the PIK interest, to turn cash interest into PIK interest. And the question -- previous question was with respect to the third-line security level we provide to all bondholders at the ADLER's Real Estate AG level. So that is a difference there.
Right. So people at the Adler Group level, who don't want to vote for the deal, would not get the security of [indiscernible]?
Yes, [indiscernible] as long as we get the [indiscernible] we all get the same terms.
There are no further questions, and I hand back to Thierry for closing comments.
Thank you, again, for joining us today. I wish you all a good day. Thank you.