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Cordia to book immediate profits of EUR 38.2 mln from Polnord takeover

Cordia International Zrt., has recently acquired 93% of Warsaw listed Polish residential developer Polnord S.A. through a combination of capital increase and public tender offer that was closed on April 9. The company expects approximately EUR 38.2 million of profits from the takeover.

Detailed review of the market value of assets of Polnord S.A. resulted in write-offs in the amount of PLN 52.2 mln to be made by Polnord in its first quarter balance sheet, according to Polnord’s current report published in Warsaw.

Cordia says that the value of actual write-offs is even lower than expected. Accordingly, Cordia expects profits from the takeover to amount to approximately EUR 38.2 mln.

"This profit will be originating from the expected difference between the equity value of Cordia’s stake in Polnord, according to Polnord’s balance sheet as of March 31st 2020, planned to be published mid-July, and the acquisition cost spent by Cordia," says Tomasz Łapiński, board member and CFO of Polnord.

Polnord has several valuable lands suitable for residential projects, of which the most valuable are the plots allowing for developments in the popular recently built and developed residential area in Warsawʼs Wilanów District.

"The Wilanów Smart City is a large scale, urban regeneration mixed use project launched by Polnord and will consist several residential and office buildings with a total area of more than 100,000 sqm," says Tibor Földi, chairman of board of Cordia.

Polnord has been involved in the development of this area and its current land bank shall allow for planning of another few thousand apartments to be built there in the future.

According to a press release sent to the Budapest Business Journal, Cordia has recently increased the company’s capital by an additional HUF 12 billion in order to finance its acquisition of 20% stake in Argo Properties NV, a Dutch company active in the residential rental business in Germany with special focus on Leipzig, Dresden, Magdeburg and Berlin.