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Czech-based Orco seeks disposals after loan repayment demand
April 2, 2014 / 7:22 AM / in 4 years

Czech-based Orco seeks disposals after loan repayment demand

PRAGUE, April 2 (Reuters) - Czech developer Orco Property Group said it was looking to sell assets after receiving notice from the bank financing its Zlota 44 residential block in Warsaw for the repayment of loans totalling more than $83 million to finance the troubled project.

Orco said it was looking to sell the unnamed liquid assets to repay loans of 170.1 million zlotys ($56.2 million) and 19.6 million euros ($27 million) due in 30 days.

“(Orco) is putting all in place in order to collect the needed cash in due course mainly by selling the liquid assets,” it said in a statement.

It did not give any more details. A spokesman had no immediate comment about the assets it could sell.

The company had said last week it was looking to sell the unfinished Zlota project after reporting a deep loss in 2013 due to charges and writedowns, half of which were caused by the Warsaw project.

The block, designed by architect Daniel Libeskind, is one of the tallest constructions in the Polish capital and stands near the Palace of Culture and Science, Warsaw’s tallest building.

Orco had said Zlota 44 had run into a succession of problems, including a lack of bank financing after it defaulted on certain loan covenants and an unsuccessful sales re-launch on the local residential market.

The group 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 last month. It did not provide further details.

Orco, founded by Jean-Francois Ott in 1991, has struggled to recover after being hard hit in the global financial crisis of 2008-09.

Its largest shareholder, Czech real estate investor Radovan Vitek, who bought into the company in 2012 and holds a 30.7 percent stake, was quoted saying in a news agency interview in January that its future was uncertain and liquidation was a possibility. ($1 = 3.0290 Polish Zlotys) ($1 = 0.7249 Euros) (Reporting by Jason Hovet; Editing by David Holmes)

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