Paris court grants extension of Orco's protection from creditors

CEE property developer Orco Property Group said on Friday that the Paris commercial court has decided to grant an extension of its protection from creditors (Procédure de Sauvegarde) by a further six months. The safeguard procedure protects the company against its creditors.

In the coming weeks the French administrators appointed by the Paris court will hold individual consultations with the group's creditors. Meanwhile, Orco Property Group's management will present a new plan to the court and creditors for their opinion and discussions, it said.

Last week, the Paris-based real estate investor and developer was reported to have hired UBS bank to help find new potential investors as a deal with US group Colony Capital for a EUR 80 mln capital injection becomes less likely. Orco's CEO Jean-Francois Ott told daily Hospodarske Noviny that a deal on debt restructuring with bondholders before next month was also not likely.

Orco Property Group has been under creditor protection since March this year. Its German subsidiary Orco Germany announced last Thursday its corporate equity had shrunk by 50%. The loss is the effect of large 'impairments on intercompany loans and participations based on the interim accounts as of August 31, 2009', it said. The announcement follows the recent rejection by bondholders of a restructuring plan presented on September 24.