Vovos to seek damages if Greek court stalls project

ATHENS May 18 (Reuters) - Greek real estate developer Babis Vovos (VOVr.AT) said on Monday it may seek compensation from the city of Athens if a Greek court rules against the construction of its biggest mall project.

Shares in Vovos plunged 29.8 percent to 3.43 euros in early Athens bourse trade, underperforming the general index .ATG, which was 0.94 percent softer, after press reports the court had ruled against the project.

"Management will claim losses ... if the project is cancelled," Vovos said in a bourse filing on Monday. It said losses could top 280 million euros ($379.2 million), excluding the construction cost of the project.

With the global economic downturn hitting investments in residential and commercial real estate in Greece, Vovos was counting on the 250 million euros project to grow revenues.

According to Greek media, Greece's highest court decided in a closed meeting on Friday that legal clauses allowing Vovos to build a shopping mall in Athens' underdeveloped Votanikos district could be in breach of Greek and European law.

It could be months before the court's decision is officially announced.

"A possible cancellation of the project could hit the firm's net asset value (NAV) and growth prospects," said an Athens-based analyst who declined to be named.

"Seeking retribution may take a long time and affect the company's liquidity." Vovos planned to complete the mall by the end of the year, expecting annual rental income of about 35 million euros. A group of 130 residents challenged the project on environmental grounds and construction was halted in December after a temporary court injunction.

Vovos appealed the decision, ahead of the final supreme court ruling. Its appeal was rejected. In March, the company announced a deal with banks to extend the maturity of a 125 million euros loan it took to finance the Votanikos project. ($1=.7384 euros) (Reporting by Angeliki Koutantou; Editing by Andrew Macdonald)