(Adds dropped word "to" in second paragraph)
By Robert Muller
PRAGUE, March 28 Czech company Orco Property
Group has slumped deep into the red after
taking hefty charges mainly for a troubled appartment block in
Warsaw, pummelling its shares to a record low.
The company, which has been trying to get back on its feet
after being hit hard in the financial crisis of 2008-2009, also
announced its second management shakeup in the space of a month,
involving multi-million euro payouts to founder Jean-Francois
Ott and other executives who are departing.
It said it had set aside 252 million euros worth of
provisions, impairments and valuation adjustments in 2013, more
than half being for the unfinished 192-metre Zlota 44
residential tower in Warsaw, which Orco said it wanted to sell.
The block, designed by architect Daniel Libeskind whose
practice is involved in modernist buildings in cities from
Berlin to Seoul, is one of the tallest constructions in the
Polish capital and stands near the Palace of Culture and
Science, Warsaw's tallest building.
Orco said Zlota 44 had run into a succession of problems,
including a lack of bank financing after it defaulted on certain
loan covenants, a dispute with the main contractor and an
unsuccessful sales re-launch on the local residential market.
The group said it had granted a short-term option on the
skyscraper to OTT Properties, a group related to the company's
departing founder, who left his role as chief executive in a
shake-up earlier this month, though Orco said at the time he was
remaining as chairman.
Orco gave no further detail on what the option involved and
whether this meant Ott was planning to buy the building.
The executive shakeups reflect the increasing influence over
the company of its largest shareholder Radovan Vitek, who holds
30.7 percent in the group.
Orco said Ott and other exiting managers would receive 7.15
million euros in cash as well as property in Prague and Berlin
worth 8.40 million euros.
The troubled outlook of the company was highlighted in
January when Vitek was quoted saying in a news agency interview
that its future was uncertain and liquidation was a possibility.
Orco, which has posted a net loss in four of the past five
years according to Reuters data, also said on Friday its 2013
net loss widened to 227 million euros ($311.9 million) from 41.9
million a year before.
Its net asset value (NAV) per share shrank to 1.92 euros at
year end from 4.93 euros the year before, due to writedowns and
cutting its stake in its Orco Germany unit.
Revenue dropped to 145.9 million euros from 244.7 million in
2012, the latter being adjusted for comparison purpuses to
exclude a major asset sale that year not matched in 2013.
Orco's shares lost more than 13 percent and traded at 28.8
crowns by 0843 GMT. They fell as low as 28.15 crowns, their
The company said it would look at selling assets including
shares in its profitable Orco Germany subsidiary.
($1 = 0.7278 Euros)
(Editing by Jane Merriman and David Holmes)