Austrian developer Immofinanz cannot rule out more revaluations in the next quarter if the market deteriorates further, its chief executive told an Austrian paper.
The company reported heavy first-half losses on Monday after its emerging European arm Immoeast was hit by revaluations in its real estate portfolio and writedowns due to halted projects. “Using realistic estimates, I believe that should be it, but if the market suddenly gets worse then there is the risk of further depreciations,” CEO Thomas Kleibl told daily Kurier in comments published on Tuesday.
The company, which has which has said it needs €110 million ($154 million) by the end of the year to keep afloat, said in October it was considering a possible merger with its Immoeast unit. Analysts have said a merger of the two companies could put Immoeast shareholders at a disadvantage, because they would be burdened with Immofinanz’s debt in such a deal.
“We have good reasons to merge the companies,” Kleibl, who became CEO in October, told Kurier. “When we have solved the inter-company credit problem, then there is scope for a merger within one to two years,” he said.
The two companies’ shares have been battered heavily after they had to write down the value of properties in eastern Europe and over investor concerns about corporate governance issues. (Reuters)