In an interview quoted by Bloomberg, Orco’s CEO Jean-Francois Ott commented on various aspects of the business. Regarding the refinancing of the GSG portfolio (€ 300m loans), Mr Ott said potential progress could be seen in the next few weeks. One of the conditions to move forward with the refinancing was an agreement with bondholders of (104 CZK, -0,19%) Germany, which was reached last week. Mr Ott expects to raise refinancing of some € 225m-250m. Mr Ott also talked about the sale of Sky Office, stating that the sale of the building fell through last year because the buyer could not obtain the financing necessary to complete the transaction. According to Mr Ott, financing availability for the real estate sector is contracting and could be even harder to obtain in 2012. Despite this, Mr Ott expects the building to be sold in 2012, bringing the group’s revenues to € 300m. Regarding the Zlota 44 residential building in Warsaw, Mr Ott stated that he expects the occupancy permit to be obtained in January 2013 and deliveries to start thereafter. is considering building another skyscraper in Warsaw but no location has been disclosed yet.
Our view:
The market was already aware of most of the ideas presented in the interview with Orco’s CEO. Decreasing availability for debt financing is also in line with our forecast for the sector. We view the news as neutral.