Behind Lars Windhorst’s scramble to repay H2O



Lars Windhorst, the fast-living German financier, failed to look in a London courtroom in June to answer one in all a number of lawsuits filed in opposition to him by aggrieved collectors.

“This isn’t ok by Mr Windhorst!” complained the decide, Jervis Kay.

When Windhorst’s barrister defined that the 45-year-old, who spends a lot of his time on a non-public jet, was “not within the UK in the mean time”, the decide warned that her shopper risked being held in contempt of court docket.

“You and Mr Windhorst are each residing on borrowed time,” he added.

It was a stern rebuke from a decide. However for Windhorst the €65mn declare from Norwegian transport magnate Kristian Siem was barely a rounding error within the sum of his unpaid money owed.

Months earlier, his funding agency Tennor had missed a deadline to repay greater than €1bn to H2O Asset Administration, which bumped into bother after pouring bizarre savers’ cash into Windhorst’s ventures, starting from a movie distribution firm to a lingerie maker.

Having as soon as overseen €30bn of property, H2O slid into disaster in 2019 after the Monetary Instances uncovered the dimensions of its outsized wager on Windhorst. Traders’ cash continues to be trapped within the so-called “aspect pockets” H2O set as much as isolate €1.6bn of those hard-to-sell property.

After years of ready for compensation, final month Windhorst pledged he would hand over more than half a billion euros to H2O “within the coming weeks”.

Windhorst does have a behavior of escaping precarious conditions. In his 30s, he averted jail after receiving a suspended sentence in a high-profile prison case and likewise survived a aircraft crash that claimed the lifetime of one of many pilots.

Nonetheless, the present problem is formidable. Tennor’s funds have been in disarray for years. Windhorst’s funding agency was briefly declared insolvent by a Dutch court docket final yr and it has not filed audited accounts since 2018. Even that yr’s monetary statements at the moment are doubtful: Tennor informed its auditor in February {that a} materials error meant they might “not be relied upon”.

Tennor informed the FT that it “stands behind all of its monetary accounting” and the correction within the 2018 accounts was associated to the timing of a writedown.

Even when his €550mn cost to H2O arrives as promised, it might nonetheless solely cowl a 3rd of buyers’ financial savings trapped within the asset supervisor’s funds. Windhorst additionally stands to achieve from the association, as a result of H2O is permitting him to settle a lot of his debt at a deep low cost.

And after the financier’s earlier repeated failures to repay H2O to schedule, many buyers have misplaced persistence.

Collectif Porteurs H2O, a gaggle of disgruntled buyers that features insurance coverage firms and rich people, is pursuing authorized motion.

The group’s authorized consultant Dominique Stucki described H2O’s relationship with Windhorst as “terribly peculiar and unprofessional”.

“There may be nonetheless no indication of how [H2O’s founders] Bruno Crastes and Vincent Chailley have ever tried to compel Lars Windhorst to pay what he owes to the funds,” the lawyer informed the FT.

H2O declined to remark.

The proficient Mr Windhorst

Crastes, the Frenchman who heads H2O Asset Management, as soon as had an in depth bond with Windhorst.

The pair would focus on offers whereas eating collectively at personal members’ golf equipment or aboard the financier’s 240ft-long superyacht. And after the FT first highlighted their shut relationship in 2019, Crastes leapt to Windhorst’s defence, publicly praising him as “extraordinarily proficient”.

Bruno Crastes addresses investors
H2O co-founder Bruno Crastes, pictured, has had an in depth bond with Lars Windhorst © h2o

Whilst rattled buyers yanked €8bn from H2O’s funds within the wake of the FT’s report, Crastes and Chailley dove deeper into Windhorst’s world.

In 2019, H2O carried out big bond trades with a Windhorst-linked dealer, during which the German financier himself was the last word counterparty. Tennor additionally quietly poured greater than €100mn right into a mysterious new fund that the asset supervisor christened “H2O Deep Worth”, company filings present.

However after French regulators stepped in two years in the past, H2O modified tack. The asset supervisor minimize Windhorst’s direct line to its 57-year-old chief government, in accordance with folks accustomed to the discussions. The financier now offers with Crastes’s subordinates and the agency’s exterior advisers throughout restructuring negotiations.

H2O informed the FT it had “reallocated assets” to permit “portfolio managers, together with Bruno Crastes and Vincent Chailley, to deal with managing the funds [and] methods and a separate devoted group to work with our monetary and authorized advisers on the [side pocket] liquidation”.

Bringing in skilled advisers has carried out little to salvage H2O’s Windhorst-related investments, nevertheless.

With the financier mired in recent claims from collectors, the asset supervisor wrote down the worth of the aspect pockets from €1.6bn to €1bn on the finish of final yr.

A couple of weeks later, Windhorst missed a deadline to repay €1.1bn to H2O. As an alternative, in lieu of any money, he gave H2O simply $106mn value of convertible bonds linked to Israeli know-how firm Gett in January.

The taxi app start-up was then poised to go public at a $1bn valuation. However the deliberate itemizing fell aside shortly afterwards — due to Gett’s intensive publicity to Russia — and the corporate is now present process a debt-for-equity swap, crushing the worth of the securities Windhorst handed to H2O.

The asset supervisor informed the FT that its holding of the Gett-linked bonds is “at present valued at zero”.

Windhorst has remained tight-lipped on the specifics of how he has since supposedly cobbled collectively sufficient cash to repay half a billion euros to H2O, past telling the FT that Tennor’s “numerous set of companies throughout sectors and geographies have carried out strongly within the first half 2022”. However he has spent a lot of the yr travelling to Africa, hanging new offers and reviving previous pursuits on the continent.

In April, Windhorst’s long-struggling Sequa Petroleum acquired an curiosity in some Angolan offshore oilfields, via a brand new three way partnership with Namibia’s nationwide oil firm (Namcor) and Nigerian entrepreneur Vincent Ebuh’s Petrolog Group.

Windhorst additionally lately took again management of African farming firm Amatheon Agri, filings present, having beforehand disposed of his majority stake within the group that has operations in Zambia, Uganda and Zimbabwe.

Monetary entanglements

Regardless of struggling to recuperate cash from Windhorst, H2O has proved reluctant to launch litigation in opposition to him, in stark distinction with a rising variety of different collectors.

Delivery magnate Siem, Manfredi Lefebvre d’Ovidio and Andreas Heeschen — three European entrepreneurs who’ve beforehand carried out offers with Windhorst — have all sued him personally in London’s Excessive Courtroom. In July, Abu Dhabi brokerage ADS Securities additionally filed a recent declare in London in opposition to Tennor.

H2O has additionally had its personal monetary entanglements with a number of of those events now suing Windhorst.

The asset supervisor’s aspect pockets embody $64mn of bonds from ADS Securities, which alleges Windhorst did not honour an settlement handy over €27mn and shares in a US tech firm final yr.

Gett card on a car in Israel
H2O says its holding of convertible bonds linked to Israeli firm Gett, which got here from Lars Windhorst, is ‘at present valued a zero’ © Alamy Inventory Picture

H2O additionally beforehand invested in bonds from Ignition Investments, an entity linked to Heeschen, who was previously the bulk shareholder of German gunmaker Heckler & Koch. In his lawsuit, the 61-year-old businessman alleges that proceeds from Ignition funded a €33.6mn private mortgage he made to Windhorst that has not been repaid.

Within the case of transport magnate Siem, H2O not solely beforehand held bonds in one in all his eponymous firms, but in addition allegedly agreed to have interaction in trades with him on Windhorst-related bonds.

In Siem’s €65mn declare in opposition to Windhorst, he alleged H2O agreed to purchase €10mn of Tennor bonds from him in July 2019, providing to pay above face worth for the securities. That is although H2O had simply written down the identical bonds held in its personal funds to only 23 cents on the euro days earlier, blaming a “market commotion” sparked by “deeply unfair” press reviews.

The Norwegian businessman alleges H2O then “did not buy the Tennor bonds”, defaulting on the settlement, which Windhorst had agreed to backstop. H2O declined to touch upon the allegations.

Tennor stated it expects to settle with ADS “very quickly”, however that Heeschen’s lawsuit is “with out benefit” and might be defended “vigorously”.

Whereas the push of lawsuits have additional difficult efforts to repay H2O, there are indicators the financier is near reaching a detente with a minimum of a few of these different aggrieved collectors.

Heritage Journey and Tourism, a Bahamian funding automobile linked to d’Ovidio, a Monegasque billionaire cruise magnate, gained a €172mn judgment in opposition to Windhorst in London’s Excessive Courtroom final yr.

A consultant for Heritage informed the FT it’s “presently concerned in what it considers to be very constructive discussions with Mr Windhorst and Tennor Group, aimed toward discovering a method ahead for the businesses on which we share curiosity”.

And on Wednesday, Windhorst’s rescheduled questioning listening to within the Siem case was vacated on the final minute, sparing the financier from one other court docket look.

Source link