The capital increase started by GTC in Poland ended with an oversubscription of more than 34 pct.
„The good results of the subscription are a sign from the investors that they approve our new strategy and support us in its enforcement. The funds resulted from the capital increase will strengthen our balance sheet and will be used for the financing of the growth by added-value assets acquisitions, by developing selected projects in our core markets and for take advantage of the opportunities to increase the company’s value“, has declared Thomas Kurzmann, CEO of GTC.
„The new liquidities will consolidate our relationship with the lenders“, has mentioned Erez Boniel, the company’s financial director.
GTC also announced that it had selected carefully some potential acquisitions targets which meet the company’s investments criteria. Those targets are situated in Poland and in the capitals in the Central and Eastern Europe.
In Romania, the developer is going through a phase of elimination of the underperforming assets in its portfolio.
In the first years of the crises, GTC had become one of the most prolific real estate developers in Romania. The company had successfully sold two of the first modern office buildings in Bucharest, Europe House and America House in Piaţa Victoriei, it had developed the City Gate towers in Northern Bucharest and started a major development process of a mall network in Romania.
In its peak, the assets portfolio value of GTC eas EUR 450 million, subject to EUR 218 million credits. Now, the local properties of the developer only value EUR 160 million, and the debts droped to EIR 121 million. How this sudden reduction took place?
In an unprecedented decision for the Romanian real estate market, in 2012, the company put on sale three of the four malls in Galleria network, the first clear sign of the decline. More precisely, GTC wax willing to sell the commercial centres Galleria Buzău, Piatra Neamţ and Suceava for a price of EUR 6-7 million, plus the associated debts. The development of the three malls involved EUR 30 million loans, shared with Aura Investments, equal partner with GTC. The two investors placed nearly EUR 60 million in the centres development, but Aura Investments exited the partnership in 2010, forcing GTC to take over its shares.
The malls sale transaction was cancelled in the last moment, after the buyer’s withdrawal, and GTC continued to promote the separate sale of the three projects.
The first sold was Galleria Suceava, for EUR 1 million, plus bank debts of EUR 8 million. Short after, Lone Star, specialized in distressed assets acquisition, entered the GTC shareholding. The Americans reached 55 pct. of GTC and intends to raise their shares to 66 pct., with the intention to completely take over the company. The shareholding change leaded to the sale of Galleria Buzău. The company also got rid of a credit in March, when it handed over to Unicredit the residential complex Felicity (324 apartments) in Băneasa, Bucharest, for EUR 25.6 million debt.
GTC received a strong hit this summer, when the retailer Cora decided to close its hypermarket within Galleria Arad, the most expensive mall in the company’s portfolio. In August, the investor announced the signing of a new preliminary agreement for the sale of the commercial centre in Arad, which is tied of EUR 27.8 million credit.
The malls in Arad and in Piatra Neamţ, the only ones left for sale, are evaluated at only EUR 7.2 million, although their development cost exceeded EUR 80 million,
If this sale will take place, GTC only remains with the City Gate towers, a performing asset where the company owns 60 pct. and which generates annual revenues of approx. EUR 10 million. (Source: capital.ro)
