E-Star Shares Drop Most on Bankruptcy Motion: Budapest Mover
E-Star Alternativ Nyrt. (ESTAR), a Hungarian energy supplier, plunged the most in more than six weeks after the company filed for bankruptcy on Dec. 8.
The shares plummeted 15 percent to 348 forint by 10:09 a.m. in Budapest, the biggest decline since Oct. 24. The stock has dived 92 percent this year as the company struggled to buy back corporate bonds at discounts.
E-Star filed for bankruptcy citing its inability to meet payment obligations, opening the right of its creditors to initiate liquidation proceedings, E-Star said in a statement to the Budapest bourse on Dec. 8. The company plans to reach an agreement with its creditors under the bankruptcy procedure to ensure future operation, according to the statement.
“We believe E-Star’s management will offer an exchange of bonds for stocks but the fair value of E-Star’s shares would drop significantly if Hungarian projects were taken over by banks,” Peter Szentirmai, a Budapest-based analyst at KBC Securities said in an e-mailed note to clients today.
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