Orco to Sell Sky Office Building Within Two Months, CEO Says
Orco Property Group (ORC) SA, the real- estate developer under a court-approved restructuring plan, expects to sell its Sky Office Tower building in Dusseldorf within two months, at a lower price than it wanted a year ago.
“We’re in the final stage of talks with two institutional investors and the deal should be closed within two months,” Chief Executive Officer Jean-Francois Ott said in a phone interview from Paris on July 27. Orco will probably sell the office building in western Germany below an earlier planned 140 million euros ($172 million) as market conditions worsened, Ott said.
Orco extended gains, adding 4 percent to 51.99 koruna as of 12 p.m. in Prague trading. A close at that level would mark heading for the biggest two-day rally in two months.
The Luxembourg-registered developer is selling assets to cut debt and focus on projects in cities including Prague and Berlin. Orco agreed with most of its bondholders to exchange about 90 percent of its 600 million-euro debt into a new stock.
The company operates under a so-called safeguard plan, which temporarily protects it from creditors and allows management to renegotiate debt agreements. A Paris court approved the plan in May 2010 after shrinking values of Orco’s assets deepened financial losses and barred access to loans.
Orco is “confident” it will refinance a loan for Berlin’s GSG housing portfolio after it announced a prolongation of a standstill agreement with Royal Bank of Scotland Plc until Aug. 31 last week, Ott said. Delays in the negotiations have been “technical,” he said.
The company, which returned to profit in the first quarter after an asset sale in Prague, will report first-half earnings on Aug. 30.
Orco has been the second-worst performing stock in Prague’s PX Index this year, sliding 39 percent. The index of 14 companies has lost 1.2 percent this year.
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