IVG CFO sees 90 pct share/NAV discount potential

LONDON, April 9 (Reuters) - Shares in diversified German property firm IVG Immobilien (IVGG.DE: Quote, Profile, Research) could trade at a discount to net asset value (NAV) of as high as 90 percent, the firm's chief financial officer said on Wednesday.

In a presentation, Bernd Kottmann repeated last month's guidance that IVG's net earnings will fall significantly in 2008 but he said that outlook excluded the potential benefits that might accrue from cashing in on its underground oil and gas storage business.

The company has appointed an unnamed investment bank to explore three potential exit strategies for its caverns unit -- full sale, partial sale, or transfer into fund.

"I am sure we will realise one of the three options this year," said Kottmann.

The bank has valued the business at up to 2.5 billion euros ($3.93 billion), and Kottmann said realising the value would effectively double the discount at which IVG's shares were trading to about 90 percent.

Shares in IVG closed at 17.1 euros compared with a published NAV per share of 29.03 euros at the end of 2007.

The shares fell heavily last month in the wake of IVG's 2007 earnings and downbeat outlook. Broker notes also showed analysts were disappointed about the lack of more detail on IVG's plans to "monetise" its caverns business.

IVG has 21 billion euros in commercial property assets under management, including half of London's "Gherkin" office tower.

It has 40 caverns mostly on the north German coast and has the potential to develop a further 90.

These caverns are typically let on long leases to triple-A tenants like BP (BP.L: Quote, Profile, Research) and hold some of the oil reserves of Germany, the Netherlands and Portugal, Kottmann said. (See www.reutersrealestate.com for the global service for real estate professionals from Reuters).