This article is from the Australian Property Journal archive
APN European Retail Property Group’s subsidiary in Romania, Victoria Holdings SA, is expected to file for voluntary administration and bankruptcy because it cannot be repay back its debt.
Victoria Holdings SA owns the City Mall shopping centre in Bucharest, Romania which owes €40.1 million to the Unicredit Bank Austria AG.
As at 30 June 2010 the value of the City Mall property is €35.4 million and the loan had breached the interest cover ratio covenant since October 29 last year.
APN said although discussions are continuing, the lender has requested for a repayment in full.
“As a result of this notice, the relevant subsidiary is no longer in a position to meet its debts and it is expected that it will therefore file for the equivalent of voluntary administration under the Romanian bankruptcy regime,” APN said.
However, APN said this loan is a limited recourse loan and has no ongoing financial impact to the group, with the exception of a corporate guarantee which secures the payment of any interest or amortisation shortfall under this loan to 30 November 2010. This amount is expected to be less than €1 million.
Australian Property Journal