Danish property developer collapses into bankruptcy

Listed Danish property developer Sjælsø Gruppen has been declared bankrupt but projects already under construction in its home market will continue.

Sjælsø reported on Friday that last-ditch restructuring talks with its creditors terminated without reaching an agreement. Subsequently, a Danish court issued bankruptcy notices and appointed trustees for Sjælsø Gruppen and its subsidiaries Sjælsø Danmark and Sjælsø Retail.

Sjælsø's international operations in Sweden, Finland and Poland are also expected to close down.

But on-going construction in Denmark at Margretheholm, Teglholmen, the project Søborg Huse and the terrace houses project in Egå are to be continued with the support of the banks and investors involved in those projects.

In addition, Sjælsø's construction management regarding the second phase of the Copenhagen Towers project will be continued in cooperation with the construction company and lending banks. Sjælsø said about 20 of its 100 staff will remain employed at these projects.

Efforts will be made to recover equity for the group’s stakeholders from the remainder of the business. In a statement, the company said: 'The trustees will in the near future, and in cooperation with the companies’ main banks, explore possibilities of setting up a management company, in cooperation with construction organisations associated with the above projects, seek to ensure the widest possible values for the companies' creditors and other stakeholders'.