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E-Star Alternativ Nyrt. (ESTAR), the Hungarian energy company that filed for bankruptcy protection in December, tumbled for a second day after failing to agree with creditors on an extension of payment deadlines.

The shares slumped 15 percent to 189 forint by the close in Budapest, extending the decline in the past two days to 28 percent, the most since Dec. 12. The stock hit a record low of 99 forint on Jan. 23.

E-Star, which was dropped from the benchmark BUX stock index after the bankruptcy filing, said its creditors rejected a proposal to extend the payment deadline by 120 days, according to a statement to the Budapest Stock Exchange after the close yesterday. The announcement is negative for shareholders, Peter Szentirmai, a Budapest-based analyst at KBC Groep NV (KBC)’s broker unit, wrote in a research report today.

“We believe E-Star’s bondholders, particularly institutional bondholders, will stick to their proposal of capital increase, which would basically lead to a huge dilution in current shareholders’ ownership,” Szentirmai wrote.

To contact the reporter on this story: Andras Gergely in Budapest at

To contact the editor responsible for this story: Wojciech Moskwa at

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