Sjaelso says 2010 will be 'a challenging year'

Danish property company Sjaelso expects to post a pre-tax loss of DKK 450 - 550 mln (EUR 60-74 mln) in the current year, with 2010 forecast to remain 'challenging' for the property market. In a statement this week, the company said it will likely remain in negative territory next year, envisaging a pre-tax loss of up to DKK 250 mln (EUR 34 mln) for 2010.

'Sjaelso expects 2010 to be a challenging year for the property market. Based on current negotiations and inquiries expectations are, however, for a modest rise in activity during 2010,' the Scandinavian developer said. It added: 'There are increasing opportunities for initiating projects in prime locations, although at reduced profits'.

Sjaelso, which is planning to boost its finances through a DKK 500 mln rights issue later this year, said that it has reached an agreement with its main creditor banks to receive funding until the financial operation is completed. The company is also coming closer to reaching a final agreement with a group of banks and its main shareholder, SG Nord Holding regarding the share they will subscribe in the operation, it added.