E-Star Alternativ Falls to Five-Week Low on Municipality Debts
E-Star Alternativ Nyrt. (ESTAR), a Hungarian energy company, fell to the lowest in almost five weeks after halting services to towns that fell behind on payments.
The shares dropped 5.1 percent to 407 forint by 11:08 a.m. in Budapest, extending its losses in the past six days to 11 percent.
E-Star said its seeking to protect investors after some municipalities accumulated debts for as long as 1 1/2 years, causing “growing liquidity problems,” according to a statement to the Budapest Stock Exchange on Sep. 29.
“E-Star has less and less operating projects thus generating sufficient cash flow to meet future debt/bond obligations is exposed to increasing risk,” Peter Szentirmai, a Budapest-based analyst at KBC Groep NV’s broker unit, wrote in a research report today.
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