E-Star Drops to Record Low on Municipality Debt: Budapest Mover
E-Star Alternativ Nyrt. (ESTAR), a Hungarian energy company, fell to the lowest on record after saying that rising non-payment by local governments hit its liquidity.
The shares dropped 5.2 percent to 405 forint by the close in Budapest, the lowest since at least October 2007. The slump brought its losses in the past seven trading days to 28 percent and its plunge in 2012 to 91 percent.
Outstanding receivables from the company’s “four major problematic” municipal clients increased, which has a “significant harmful” effect on liquidity, E-Star said in a statement to the Budapest Stock Exchange after the end of trade yesterday.
E-Star’s dwindling cash made it “questionable” the company will be able to meet its bond payments this year, Erste Group Bank AG wrote in a research report today.
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