A court in Amsterdam has approved Plaza Centers’ request targeting a preliminary suspension of payments and has appointed a judicial administrator.
During the restructuring process, the company plans to carry on with its activity and will be run by its management team and the court appointed administrator.
Plaza Centers has proposed a three-four-year moratorium to its creditors on payment obligations. The court set creditors are to meet on April 17, 2014 to approve the reorganization plan.
The Israeli investor owns 75% in Dambovita Center, which is developing the Casa Radio project, while the Romanian state owns 15%, through the National investment Company. The remaining share is held by Turkish group Kucuk.
Besides the Casa Radio project, Plaza Centers owns land for the development of shopping centers in Iasi, Miercurea Ciuc, Timisoara, Hunedoara, Targu Mures, Constanta, and Slatina.
Casa Radio, on the bank of the Dambovita river, one of the largest buildings in Romania, is set to be 70% demolished and a real estate project with a built area of 600,000 square meters is to be built in its place. Although the project’s market value has dropped to less than half, the planned surface has remained unchanged. According to the most recent information available, the project would include a 76,000 sqm shopping center, an investment estimated at EUR242 million. Revenues from rents are expected to reach EUR27 million and the center is set to be completed in 2017.
The project also includes an office building area of 219,000 sqm and a residential area of 59,600 sqm.
However, all the developer’s projects in Romania have been postponed repeatedly citing adverse conditions on the local real estate market.
Plaza Centers, 62.5% owned by Israeli group Elbit Imaging, operates in eight countries in the region, Romania, Poland, Lithuania, Hungary, Czech Republic, Serbia, Bulgaria, Greece, as well as in India, where it has 30 assets in various stages of development.
At the end of June, the company’s debts totaled EUR400 million and its assets were estimated at nearly EUR800 million.