DGAP-News: TERRAGON AG: Restructuring is inevitable – TERRAGON AG and its subsidiaries file for bankruptcy on page 1

• Implementation of short-term measures
• More measures made more difficult

Berlin, 30 June 2022 – As announced in a special statement dated June 29, 2022, the Board of Directors of TERRAGON AG (Company Bond, ISIN: DE000A2GSWY7) has decided to file for bankruptcy for the issuer and its subsidiaries. The background to this is that negotiations on the sale of the Welkerstift project in Duisburg failed unexpectedly. This leads to the bankruptcy of the main subsidiary TERRAGON Wohnbau GmbH. Alternative options for action to avoid this are no longer clear. TERRAGON AG itself is still able to pay its debts, but has opted for reorganization and restructuring in insolvency proceedings to ensure the company’s continued existence.

Important measures to overcome the liquidity crunch could not be implemented as planned. In particular, the general situation in the real estate markets and the tense situation of the company made it extremely difficult to sell projects and finance the company:

The short-term measures promised by the management of TERRAGON AG to overcome the liquidity crunch have been successfully implemented. This included a financial contribution of €2.4 million from the main shareholder, Held Beteiligungen GmbH, as well as the agreement of bondholders and other important creditors to defer interest on bonds and liabilities.

However, implementing other necessary measures was much more difficult. Due to the explosion in construction costs, potential buyers of projects in forward financing expect a high level of security to complete projects, which TERRAGON cannot currently provide.