Adler Gro p Bond Villain

Adler Group is a stitched together and overly indebted dumpster fire, operated for the sole
benefit of a secretive, kleptocratic cabal.

OCTOBER 6, 2021 – Viceroy Research is short Adler Group SA (ETR : ADJ) and its listed subsidiaries. The Adler
Group is a hotbed of fraud, deception and financial misrepresentation designed to hide its true financial position,
which is bleak. The Adler Group exists as a conduit for its shadow directors and associates to systematically
enrich themselves to the detriment of bondholders, shareholders, and minority holders of various listed
investments.

Earlier this week, Adler anno nced that it had beg n a re ie of a strategic sale of its ielding portfolio.

Properly accounted for: Adler has already triggered a default-event, and it does not appear its mismarked
assets can support its crippling debt. Substantial sales of Adler’s yielding portfolio will have a moot effect on
Adler’s LTV - which we calculate to be in excess of 85% - and eliminate thin operating cash-flows.

Any such “strategic” divestment will be a purely optical attempt to pay down debt, or worse, as a last chance for
undisclosed related parties to strip any remaining value in the structure.
Adler Mod Operandi
Adler Group’s modus operandi is to acquire or force mergers with better capitalized companies to then saddle
them with debt. Management then channels cash and assets to enrich its friends and associates via undisclosed
and blatantly uncommercial related-party transactions, many of which are never intended to be settled in full.
The related-party nature of these transactions is always hidden. This is not a matter of one or two small
transactions. This behavior is endemic and continues today.

Viceroy struggled to find any truly arm’s-length transactions Adler has undertaken in its corporate history.

Adler engages in three broad types of transactions:

Looting Transactions are where:

An asset is bought from an Adler Group company by a related party at a deflated price; or
An asset is sold to an Adler Group company by a related party at an inflated price.

Either way: value is transferred out at shareholders’ expenses.

Marking Transactions are where an asset is bought by an undisclosed related party at an inflated price, but
the consideration is never settled in full. Adler’s book is then artificially marked up by unrecovered receivables.

Despite little cash consideration being paid, the underlying asset (e.g. development plot) changes hands.
When Adler loses control of this asset, related parties can (and do) borrow against these assets. When the
transaction is inevitably reversed, Adler receives its asset back, but with a large mortgage.
These “Marking Transactions” are also laced with looting, as related parties never seems to miss an
opportunity to steal. When these deals are inevitably reversed, Adler will pay tens of millions in “JV fees” or
a penalty to the related-party buyer. Money is thus transferred out on a deal that was never intended to be
completed.

Co p D état Transactions are where:

Adler, often with leverage and in concert with undisclosed related parties, buys a controlling stake in an
asset-rich company. The latter is a major breach of regulatory disclosure obligations.
Once Adler control the board of the target entity, they flip the board and attempt to force a merger with
the parent and proceed to loot the asset-rich target via “looting transactions” and “marking transactions”.

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