The escalating Orco battle

We admit to being a bit fascinated by the new Ott blog, although the inherent dangers in such a venture were clear from the start. Our own view would be that discretion really does tend to be the better part of valor when it comes to putting words to paper/cyberspace. There does appear to be a war on now, so it’s probably safe to assume that the public nature of this conflict will escalate.

At the heart of the debate is the question of where the root cause of Orco’s problems lies. Ott is claiming the current debt crisis is not the result of any management mistakes. Instead, he says, it’s the result of the credit crisis, and he complains that recent press coverage of Orco has ignored this.

What bothers me is that the reader doesn’t get to hear the whole story, and one could think that today’s debts are the result of management errors. The stories read as if the worldwide financial crisis of 2008 which devalued many real estate assets especially those of emerging markets, never happened. Financing is the fuel of the real estate engine, and our leverage, whether from banks or bonds, is based on concrete projects that have been delayed due to the crisis.

Millenius is pointing the finger directly at the CEO, and has called for his dismissal at the newly convened April 26 shareholders meeting.  One of the points (5.3) on the agenda they’ve demanded is an explanation about why holders of warrants were made an offer that would have diluted shareholders, without asking for shareholder approval.

As ever, readers are welcome to write in their comments, or send us emails.


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