Who says there’s no distress this recession? EBP has sold a 51 percent share in the Vitantis Shopping Center in Bucharest and the Moldova Mall in Iasi to Denesol Limited, a Cyprus-based company owned by a member of the company’s top management. According to a letter sent to the London Stock Exchange where EBP is listed, the price was €5 and the full amount was paid in cash.
It’s not hard to work out why. Vitantis, for example was bought in 2006 for €30.6m and together with Moldava Mall has €58.4m worth of loans. But the properties were recently valued at €56.8m, and judging from the owner’s letter to the Stock Exchange, there seems little interest from the company in the old pretend and extend game.
The board believes that the assets are excessively over-leveraged and EBP is unable to provide the required funds to support asset management fees and the capital expenditure requirements for the assets…
The two properties produced a loss of €2m over the first nine months of 2010 and EBP’s conclusion is that it “does not expect market conditions for these Assets to improve in the near term.”