IVG Immobilien, the property firm from Germany, said that it would need to lessen its liabilities by at least Eur1.75 billion or US$2.27 billion in order to be viable. The said debts were accumulated after it had conducted an expansion program that increased its debt burden.

The company announced that the reduction in its debt burden was mandatory in order to make 'its loan-to-value ratio and its interest coverage ratio to a normal market level, thereby making it fit for the capital markets once again in the longer term.'

The Bonn based company said last March that it needed to restructure nearly Eur4 billion in debt to ensure that it has enough capital left over to refinance the other loans that would mature in 2013 and 2014.

It also said that it was studying the feasibility of a debt for equity swap that would mean extra costs for its shareholders and debt holders.

The company currently has a portfolio value of Eur21 billion. It has a stake in the iconic Gherkin office building in London. Last year, it reported a Eur100 million net loss and it had skipped a promised dividend to its shareholders. It also deferred the coupon payments for a payable hybrid bond.