Developer ECM sold buildings in Pankrác for 1.8 billion crowns

Prague - The development company ECM Real Estate Investments has sold the office building City Empiria and the adjacent conference center City Forum in Prague's Pankrác for 71.5 million euros, approximately 1.8 billion crowns. The company announced this today. The name of the investor has not been disclosed.
    The net income of ECM REI from the transaction, after deducting liabilities, amounts to 12.1 million euros (around 309 million crowns). "The company intends to use the proceeds from the sale as an equity investment for future business activities," said Milan Janků, the CEO and main shareholder of ECM REI.
    The developer already announced at the beginning of May the sale of the planned project City Court, which is also located in Pankrác. The company Skanska Central Europe Holding purchased it for 199.4 million crowns. At the end of last year, ECM sold the tallest building in the Czech Republic, the office tower City Tower, located in the same area, for 3.4 billion crowns. In Pankrác, the company is developing new projects into which it wants to invest 3.5 billion crowns. However, civic associations are protesting against the construction of new high-rise buildings.
    ECM previously stated in its annual report that the company is currently in breach of the bond contract terms, which stipulate that the debt-to-assets ratio must be below 65 percent. Currently, it stands at around 80 percent. The reason for the higher indebtedness is attributed to the decrease in asset values and ongoing losses. A general meeting of bondholders may decide on May 27 to call for their early repayment at 125 percent of the nominal value of the bonds. The developer aims to rectify the situation by then and negotiate with the bondholders on tolerating higher indebtedness.
    ECM REI reduced its loss in 2009 to 62.3 million euros (approximately 1.6 billion crowns) from a loss of 92.1 million euros (about 2.4 billion crowns) in 2008. The company is expected to announce its results for the first quarter of this year on Wednesday.