Mexican Landmark versus German Bad Bank

Challenge

Mexico
Mexico
Global Hospitality Investments (GHI) was a large US real estate private equity investor. It acquired two properties in 2007 with a loan from the former Hypo Real Estate Group (HRE). In 2010, HRE’s portfolio was transferred to FMS Wertmanagement (FMS), the Federal government’s winding up institution for the HRE.

Global Hospitality Investments
Global Hospitality Investments
GHI offered to buy back the loan from FMS to save the property investments and proceed with the development plans. FMS was not willing to deal with GHI, which made any solution almost impossible. GHI sought Alber & Geiger’s help with the ensuing impasse to find a deal.

Strategy

ag-wins-map-bad-bank
We crafted a clear and concise message for the German government and the Bundestag that highlighted the bureaucratic approach of FMS regarding the offer put forward by GHI. The behaviour of FMS did not respect good governance principles and ignored the purpose upon which it was created, namely to “unwind the portfolio whenever it is financially advantageous and thus to achieve the best possible outcome in the interest of the German taxpayer.” The strategy demonstrated to the German Finance Ministry and the Bundestag that the circumstances demanded an equitable treatment of GHI. It drew on an understanding of the financial the political mindset in Germany that was used to strengthen the GHI proposal.

Results

Sophisticated EU Advice.
Laurent Poole- President & CEO, Global Hospitality Investments
Alber & Geiger helped GHI prepare the offer and guided the it through the entire process while ensuring the political backing of the German Finance Ministry and the Bundestag for a deal with FMS Wertmanagement. The transaction was finally completed in March 2015.