“This decision follows a legal dispute relating to the sum of EUR3.2 million claimed by S.C. Constructii Bihor SA arising from a construction contract related to ERA Shopping Park Oradea. Under Romanian law voluntary insolvency leads to a form of ‘judicial administration’ which allows a company to restructure its balance sheet whilst providing it with a degree of protection from its creditors,” the investment fund said in a statement Monday.
Omilos Oradea will file for voluntary insolvency after consultation with the consortium of its senior lenders, the statement reads. Omilos Oradea owes EUR62.3 million to EFG, Bank of Greece, Bank of Cyprus and Banca Romaneasca.
“However, the outcome of the voluntary insolvency, if not accepted by a majority of creditor voting classes, could lead to bankruptcy and liquidation of the assets of Omilos Oradea to satisfy its creditors. If such liquidation happens, it will result in the loss of Omilos Oradea assets,” the statement reads.
The first phase of Era Shopping Park Oradea was opened in March 2009. It hosts retailers Carrefour, Altex and Bricostore. The second phase of the project, which includes a 12,000-sqm mall, was opened in the spring of 2012.
Argo owns four shopping centers in Romania, with a total lettable area of 271,000 sqm, and is one of the largest shopping center owners in Romania.
The four malls registered revenues of EUR22.3 million in the 2011-2012 fiscal year ended in September, up 64% on the year.