RomReal Press Release: Update on the financial situation of the Company.
(Thomson Reuters ONE) -
RomReal wishes to update on the serious financial situation of the Company.
As previously stated, the Company has a bullet loan of EUR 11.6 million with
Alpha Bank in Romania which matures on the 30th November, 2012. All interest on
this loan up to maturity has been pre-paid in advance, but the principal payment
will become due on the maturity date. The Company does not have sufficient cash
to make this payment, or any significant down-payment, as it has been very
difficult to divest assets during the severe downturn in Romanian real-estate
market.
RomReal's management is currently in on-going discussions with Alpha Bank
regarding a restructuring of the loan, but no agreement has been reached at this
stage. The Management therefore wants to inform that the Company could enter in
a default situation very soon if a solution with Alpha Bank is not found in
time.
The Management of the Company has over the years put a substantial effort into
reducing the operating costs of the company to adjust to the difficult market
environment and secure cash to service payments on the loan and the Company's
ongoing operating expenses. The Company will need to implement additional
significant cost savings to ensure that there is sufficient working capital to
fund its operations going forward.
If a solution is reached with Alpha Bank on viable terms, it is likely that a
capital raising from the shareholders, possibly through a rights issue, will be
needed to fund the Company's operations going forward. The details of such
capital raising will be very dependent on the potential terms of the loan
restructuring and the Company will therefore inform about further details on
such a possible issue once the situation with Alpha Bank becomes clearer.
As the Company has announced in its previous quarterly statements, the Romanian
real estate market is in a severe downturn with very few transactions taking
place in the residential segment which is the focus area of the Company's
assets. Bank financing of both construction and mortgages in Romania has almost
come to a halt. On this background, the Board is of the opinion that the
external valuation of the Company's assets carried out by the independent
valuation firm in connection with the 2012 year-end audit, could lead to further
reductions in the valuations of the Company's assets and hence a reduction in
the IFRS based NAV.
For further enquiries please contact:
Harris Palaondas
RomReal - Investor Relations
+40 731123037
info(at)romreal.com
www.romreal.com
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: RomReal via Thomson Reuters ONE
[HUG#1650555]
Unternehmensinformation / Kurzprofil:
Datum: 19.10.2012 - 08:01 Uhr
Sprache: Deutsch
News-ID 194170
Anzahl Zeichen: 3413
contact information:
Town:
Hamilton
Kategorie:
Business News
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"RomReal Press Release: Update on the financial situation of the Company."
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