Orco Property Group, the troubled property company focused on Central Europe, is holding exclusive talks with Colony Capital for a capital injection of EUR25 mln. An additional stake of up to EUR140 mln will be considered when court protection from Orco's creditors is lifted. Paris Commercial Court granted Orco and a French subsidiary a so-called Procedure de Sauvegarde for an initial six months at end-March this year. The status is renewable.
Orco Property Group, the troubled property company focused on Central Europe, is holding exclusive talks with Colony Capital for a capital injection of EUR25 mln. An additional stake of up to EUR140 mln will be considered when court protection from Orco's creditors is lifted. Paris Commercial Court granted Orco and a French subsidiary a so-called Procedure de Sauvegarde for an initial six months at end-March this year. The status is renewable.
The stake would by acquired by ColOG, a company controlled by funds advised by Colony Capital. The deal is expected to completed by the second quarter of 2009.
Under the terms of the agreement with ColOG and following a due-diligence study, Orco will issue five million shares with share warrants, at a subscription price per share of EUR5. Orco's management board is also proposing that all its shareholders be granted one free share warrant for two existing shares, entitling shareholders to subscribe to one new share at the same subscription price as the share warrants issued to ColOG.
Orco is currently engaged in drawing up a restructuring plan aimed at bolstering its balance sheet. The company plans to sell assets, exit some markets and to withdraw from the logistics and hospitality segments. The company has assets of EUR 2.5 bn and a listing on the NYSE Euronext, Prague, Warsaw and Budapest stock exchanges.
