They must have been days of satisfaction for Fraser Perring. The notorious investor from London obviously had the right instincts again when he attacked the real estate group Adler. In October, he published a scathing report on the company through his analysis firm Viceroy, speaking of dubious deals and bloated balance sheets at the expense of shareholders and creditors. Since then, he has been able to watch as things took their course, the Adler share continued to plummet, the management was gradually replaced and finally the auditors from KPMG refused to certify the company’s figures.
Now Perring goes on the attack again – and this time as publicly as possible. In the “Bild” newspaper the Briton issued dire warnings to investors on Thursday: “The Adler shareholders are threatened with total loss,” he said. In any case, the share has lost more than half of its value in the past few months. On Monday, shortly after KPMG had refused the attestation at the weekend, the papers fell to 3.90 euros in the meantime – a minus of more than 80 percent in just one month a year. In the past few days, the price has recovered somewhat, but is still well below seven euros.
If the creditors demand their money back, Adler could be finished
Perring is not an independent expert on the whole Adler case. The Brit earns his money as a short seller, so he bets on falling share prices – and the deeper the fall, the more lucrative for him. It should therefore be no coincidence that he also alludes to the biggest accounting scandal in German history: “As in the Wirecard case,” Adler’s shareholders were being duped, he said. In any case, the names Perring and Wirecard are closely linked. At the beginning of 2016, he was one of the first to cover the payment service provider from Aschheim with allegations of criminal activities in the group – and in doing so successfully pushed the share price down again and again, albeit only briefly.
And now Perring might also have an interest in further nurturing doubts and fears among shareholders and creditors. He now suspects growing unrest among the latter in particular: “We think it is likely that they will soon take the necessary steps to protect their interests,” said Perring. In concrete terms, this would mean that they could demand their money back from Adler immediately. The group is therefore “now completely dependent on the mercy of the creditors”. The largest lenders include asset managers Schroders and Blackrock, as well as Deutsche Bank and insurer Allianz.
Admittedly, Adler’s head of the board of directors, Stefan Kirsten, argued on Monday that there was absolutely no legal basis for the creditors to demand their money back immediately. After all, as agreed in the bond conditions, Adler presented audited consolidated financial statements punctually no later than 120 days after the end of the financial year – only the auditors from KPMG did not come to a conclusion because they lacked information. However, other observers are now also having doubts as to whether this point of view really holds. It would be vital for the group’s survival, Kirsten also concedes: If the creditors were to immediately demand the return of the total of 4.4 billion euros from the bonds, Adler would, in his words, “hit the wall”.