The Grounds Invites Noteholders of the 2021/2024 Convertible Bond to Vote on Its Extension on Modified Terms – With Major Noteholders Having Signalled their Approval Ahead of Time

• Conversion of 2021/2024 convertible bond into corporate bond proposed, subject to an extension of its maturity by three years and an interest increase to 8% p.a.
• Occasion to vote without assembly to be provided between 14 and 18 December 2023
• Implementing the second step of the master plan for the company’s future funding structure as announced in October 2023
• Possible capital increase in 2024 under preparation

Berlin, 28 November 2023 – The Grounds Real Estate Development AG (“The Grounds” / ISIN: DE000A2GSVV5) is inviting noteholders of its 2021/2024 convertible bond to vote on an extension of the bond’s maturity, subject to modified bond terms. The proposal about to be brought to a vote will seek to extend the bond’s maturity by three years, with the option of a one-time extension by another two years to be granted to the issuer. At the same time, it is proposed to raise the interest rate to 8% p. a. If the issuer were to make use of the extension option, doing so would result in another increase in interest to 10% p. a. In a parallel move, the company plans to cancel the conversion right, and to restructure the convertible bond subsequently as a corporate bond. Other elements of the proposal include granting the issuer the right of early termination and repayment of the bond at 100% of its nominal amount up to the end of the extended maturity, the maturity being reached on 18 February 2027, a derogation in the change of control definition in the event that H.I.G. Capital acquires an equity interest in The Grounds so that such an event would not trigger a break option for the noteholders, as well as the issuer’s agreement to limit distributions and to uphold the debt-to-equity ratio. Major bondholders of the convertible bond have already signalled during preliminary talks that they intend to approve the proposal.

Voting on the extension of the convertible bond on amended terms marks the second step of the master plan for the future funding structure of The Grounds as announced in October 2023. In a first step, H.I.G. Capital already subscribed a collateralised bond of The Grounds over the amount of EUR 10 million to finance a facilitation of ongoing property development projects. At the same time, the proposed restructuring of the company’s 2021/2024 convertible bond is a key prerequisite for the strategic partnership with H.I.G. Capital and for the cash inflow that could be generated by a possible capital increase in 2024 for the purpose of financing investments in the further growth of The Grounds in the years ahead.

As communicated on 13 October 2023 in connection with the bond acquisition by H.I.G. Capital, the Management Board and Supervisory Board of The Grounds are considering the idea to propose a capital increase in a minimum volume of c. EUR 40 million and a maximum volume of EUR 75 million to the annual general meeting. If the company were to move ahead with the capital increase, the current main shareholders, who together hold 73 percent of the company’s share capital, have already agreed to transfer their subscription rights to H.I.G. and to approve the capital increase. In case H.I.G. decides to exercise its option, the proceeds from the issue of subscription rights are to be used for the further expansion of The Grounds.

The proposal to convert the convertible bond into a corporate bond on the aforesaid terms will be decided upon via a vote without assembly. To this end, The Grounds is asking noteholders of the 2021/2024 convertible bond to cast their vote during the period starting on Thursday, 14 December 2023, at 0:00 CET and ending on Monday, 18 December 2023, at 24:00 CET. The documents relevant for the vote without assembly will be made available on the homepage of The Grounds under the item “Investor Relations – Convertible Bond” at once the invitation to vote has been published in the Federal Gazette, from 3 p.m. today.

Company Contact:
The Grounds Real Estate Development AG
Jacopo Mingazzini, CEO
Charlottenstrasse 79-80, 10117 Berlin, Germany
T. +49 (0) 30 2021 6866
F. +49 (0) 30 2021 6849
E-mail:
Web:

Investor Relations:
UBJ. GmbH
Ingo Janssen, Managing Director
Haus der Wirtschaft, Kapstadtring 10
22297 Hamburg, Germany
T. +49 (0) 40 6378 5410
E-mail:
Web:

Press Contact:
RUECKERCONSULT GmbH
Peter Dietze-Felberg
Wallstr. 16
10179 Berlin, Germany
T. +49 (0) 30 284 49 87 62
E-mail:
Web:

About The Grounds
The Grounds Group implements residential projects in German metropolitan regions. The Grounds Group also holds a steadily growing residential portfolio in its fixed assets. The Grounds Real Estate Development AG is listed in the upper free market segment of Düsseldorf Stock Exchange’s primary market (ISIN: DE000A2GSVV5), and has its headquarters in Berlin and an office in Stuttgart.

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