Globe Trade Centre SA, Poland’s second-largest property developer, slumped the most in three months after owners rejected a proposal to sell new shares for the second time in six months.
The stock dropped as much as 7.7 percent, the steepest decline since Jan. 19, and traded 6.6 percent lower to 5.49 zloty, as of 1:14 p.m. in Warsaw. The stock has gained 1.9 percent this year after losing 28 percent in 2014.
GTC management had sought to raise at least 588 million zloty ($157 million) from a rights issue to finance property purchases in Poland, Hungary, Romania and Serbia as well as develop existing projects. Lone Star Funds, its biggest shareholder, in March offered $190 million to raise its stake to 66 percent from 32.5 percent on condition that the share issue plan is approved.
“That’s a big surprise,” Michal Szymanski, a Warsaw-based analyst at DI Investors SA, said by phone on Thursday. “It looks like investors were not convinced that buying assets in the region will be beneficial for the company after quarters of losses and negative revaluations.”
The Warsaw-based developer earlier failed to secure sufficient support from its shareholders to raise capital for expansion in October. In 2014, GTC posted a fourth consecutive annual loss, which amounted to 183.8 million euros ($197 million).
Lone Star, which supported the share sale plan, won’t raise its bid price, GTC supervisory board Chairman Alexander Hesse told reporters after a shareholders’ meeting in Warsaw on Thursday.
Polish pension funds controlled by Aviva Plc, ING Groep NV and insurer PZU SA jointly hold a 33 percent stake in GTC, according to its website.