CEE and emerging markets property developer Plaza Centers is asking creditors for more time in order to sell assets and repay its bondholders.
CEE and emerging markets property developer Plaza Centers is asking creditors for more time in order to sell assets and repay its bondholders.
The Amsterdam-registered company, which was granted creditor protection by a local court in November last year, has to reach an agreement with creditors before April 17. Failure to do so will likely force it into liquidation, the company said.
Plaza, the owner of 29 assets located largely in CEE, is asking to defer all principal payments of non-collateral backed debts for a total of €182 mln for three years, from 2013, 2014 and 2015 to 2016, 2017 and 2018.
‘Liquidation will cause significant damage to the company, its creditors and its shareholders,’ the company said in a presentation of the restructuring plan.
To repay its debt, the company has put a number of assets up for sale including its 40,000 m2 Torun Plaza in Poland and the 49,000 m2 Riga Plaza in Latvia.
In a presentation to bondholders, the company said it believes the extra time will give it a chance to complete ongoing development projects and realise value from their sale. Major projects include a 35,000 m2 development in Lodz, valued at €83 mln upon completion, and the flagship Belgrade Plaza mixed-use development which includes retail, office, hotel and leisure accommodation and is expected to have a value of €150 mln upon final completion in 2016.
In Romania, the company is building Casa Radio Shopping Center, a 76,000 m2 mall in Bucharest, and another scheme in Timisoara offering 36,000 m2 of retail space.
Plaza was granted preliminary suspension of payment proceedings in November by the District Court of Amsterdam, just days after the London and Warsaw-listed property company suspended repayments to bondholders to stave off financial collapse.
Plaza was able to file in Amsterdam as it is registered in the Netherlands under the naamloze vennootschap (N.V. or anonymous venture) company structure.
In the first three quarters ended 30 September 2013, the company posted a loss of €90 mln largely due to an impairment loss of €71.2 mln related to properties in India, Romania, Serbia and Poland.