East Balkan Properties (EBP) has sold its 51% interest in Balkan Properties Cooperatief, the owner of the Vitantis shopping centre and the Moldova Mall in Romania, for a nominal price of EUR 5 in cash.
East Balkan Properties (EBP) has sold its 51% interest in Balkan Properties Cooperatief, the owner of the Vitantis shopping centre and the Moldova Mall in Romania, for a nominal price of EUR 5 in cash.
The buyer is Denesol, a Cyprus-based company owned by businessman George Teleman, the director of various subsidiaries of EBP and of the properties' asset management company.
The properties are valued at nearly EUR 57 mln but have over EUR 58 mln in debt attached.
'Due to excess indebtedness, the assets have no meaningful probability of delivering value to shareholders in EBP and represent a significant cash burden to the EBP Group, primaily due to the cost of retaining the required asset management services,' EBP said in a statement.
EBP is retaining a 49% interest in the properties, it added.
The Vitantis property is located in southeast Bucharest and is anchored by Carrefour, Techno-market and Praktiker. It comprises 11,400 m2 of retail space with tenants including Inter Sport and Domo and is currently 82%-occupied. Moldova Mall is located in the central business district of Iasi and is anchored by Technomarket. The mall has 9,024 m2 of rentable area which is currently 71% leased.
Due to declining retail sales activity throughout Romania, the malls recorded a net operating loss of EUR 2 mln in the first nine months of the year. 'Market conditions have continued to adversely impact the operating results of the assets despite the best efforts of the property managers,' EBP said, adding that it does not expect market conditions to improve in the near term.
