Troubled Austrian real estate group Immoeast said it is in talks to raise fresh financing from its banks as writedowns on assets drove it to a hefty first half loss.
The group, which is also touting assets in a bid to generate cash, posted a €1.9 billion ($2.7 billion) pretax loss. One of emerging Europe's biggest developers, Immoeast had said on Monday it would write down assets to the tune of €1 billion as well as report a €510 million loss on financial instruments.
Immoeast, majority-owned by another troubled developer - Immofinanz - said its main challenge was to secure liquidity by selling asset sales, halting development projects and through talks with the group's creditor banks.
But asset sales were difficult in the current market environment, it said.
“When selling, Immoeast's clear goal is to retain the property value as well. Therefore (the) volume of sales within the last months has been limited,” Immoeast said in a statement.
It added, however, that those asset sales that did succeed were done at the appraised value or above.
Immofinanz and Immoeast on Monday presented a restructuring plan to a group of six creditor banks - UniCredit's Bank Austria, Erste Group Bank, Raiffeisen Zentralbank and Germany's WestLB, Helaba and Eurohypo.
Immoeast said talks about fresh funding from those banks had already started on this basis.
Shares in Immoeast and parent Immofinanz have dropped by around 95% this year and both trade at only a fraction of their net asset value, which Immoeast said was now at €7.95 per share after the writedowns. (Reuters)