ECM enters bankruptcy proceedings

The insolvency proposal was submitted by Česká spořitelna, one of ECM’s large bondholders with past-due claims of Kč 7.5 million

Real Estate
Michael Stein | 12.04.2011
ECM’s City Element office building

One of the Czech Republic’s biggest property developers, ECM Real Estate Investments, announced on April 11 that Česká spořitelna (CS) bank had submitted an insolvency proposal and a propsal for reorganization. ČS is one of ECM’s largest bondholders and has past-due claims of Kč 7.5 million. Further past-due claims of Kč 16.3 million are held by Uniqa, Volksbank, AM Slovenská spořitelna, Conseq IM and Glancus Investments.

The latest step follows a week after an early repayment request by Glancus Investments had shown the bailout plan negotiated last November to be in danger of falling apart. The insolvency request brought about an immediate 10 percent drop in ECM’s share price. ECM will hold a Board of Directors meeting on April 13 to decide what course of actions to take.

Recently, ECM entered negotiations with the CPI Group for the sale of its City Deco and City Element office projects at a reported Kc 300 million each, but with ECM’s perilous financial state putting it so close to bankruptcy, CPI withdrew. Under insolvency proceedings, new management can be brought in to try and sort out the debt-burdened developer. 

 

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