GTC: down EUR 132 mln in three months

The company also has loans which might need to be repaid earlier than planned or require an immediate partial repayment. The decrease in fair value is mostly related to the company’s assets located in secondary cities in Romania, Croatia and Bulgaria as well as its Budapest land bank. GTC also said that following the reassessment of its Q4 performance in those locations, the management board decided to stop supporting selected projects and sell the non-performing assets.

The revaluation of will also have an influence on the developer’s loan obligations. The company said that given the new valuations, its obligations to maintain a specified loan to value (LTV) index in the Avenue Mall Osijek, Galeria Arad and Galleria Stara Zagora projects, could have been infringed. The outstanding total loan of the projects (guaranteed by GTC) amounts of app. EUR 66. GTC also reported that it was in the process of negotiating with respective lenders concerning the restructuring of these loans and the introducing of an accelerated repayment schedule. The company also received preliminary purchase proposals regarding some of the above-mentioned properties and it is currently evaluating the offers.

GTC’s obligations related to maintaining the LTV indexes of the Felicity and Sasad residential projects, with an outstanding loan amount of app. EUR 34 mln, were also infringed. The above-mentioned loans were, however, not guaranteed by GTC. The company is currently negotiating the terms of the loans with respective lenders, based on which lenders would acquire the above-mentioned projects or sell them jointly with GTC and thus waive the existing loans.

Currently, GTC is also negotiating with respective lenders on the restructuring of a loan incurred for the construction of the Galeria Varna shopping centre (outstanding amount of app. EUR 18 mln). The LTV covenant under such loan agreement (guaranteed by GTC) will be applicable from December 2017. The company is received preliminary offers to sell the project and is currently evaluating them. In addition, the company informed that after the revaluation, the amount outstanding under the loan related to the Galeria Piatra Neamt shopping centre (app. EUR 6 mln) would be higher than the asset value of the property. However, the company also underlined that the presented financial data had not been audited and was subject to the receipt of final valuation reports. The company’s policy is now to maintain the gearing ratio at between 40 pct and 60 pct. Based on currently available information, as at 31 December 2014 GTC’s gearing ratio would amount to approximately 58 pct.

At the same time, the management board of GTC also stresses that despite the liquidity risk, the company will be able to settle all its obligations for at least the next twelve months. According to the statement, GTC holds cash and cash equivalents worth a total of app. EUR 78 mln. The company also assures us that it is trying to effectively manage all its obligations and it reviews its plans regarding financing, which is set to be raised from available financial resources, operating income, sales of assets and refinancing.