Immorent: One in five clients needs debt rescheduling

Immorent Romania, the real estate leasing division of Austrian group Erste has rescheduled financing for 20% of its clients this year, whereas in 2008 it did not see any delay in repayments, says Bogdan Cernescu, the company's general manager.

Immorent only works with corporate clients and has almost 100 million euros in financing granted, most of which for the real estate sector and the rest for equipment.

"We have discussed with our clients and met with them more often this year to see how they are doing, what problems they are experiencing, what they expect and rescheduled financing where needed. We have rescheduled debt for about one in every five clients. They were mainly clients that are not capitalised because of the nature of their business, such as distributors, but also clients that went with the flow in 2007 and 208 and invested too much in production facilities," Cernescu says.

He adds that it is too soon to see the success rate of rescheduling, which will only be possible to determine after at least six months from now.

The company has granted a number of its clients grace periods of three, six or nine months, depending on the situation of each of them. As the leasing market is experiencing a wave of repossessions from clients with cash flow problems, including land and buildings, Cernescu says that the company has not repossessed anything on the real estate segment yet and has had only a few repossession cases on the equipment segment.

The leasing market has posted a sharp fall this year, 74% in the first half, to 776.6 million euros. Real estate leasing accounts for 20% of total market, with the value of the financed goods in the first half standing at 152 million euros, down 21% compared with the first half of 2008.

Immorent conducted three sale & lease back deals this year, although it had expected more such deals.

One of the three sale & lease back transactions brokered by Immorent was worth more than 10 million euros, while the other two ranged between 1 and 3 million euros.

Bogdan Cernescu expects to end this year with ten new financing contracts at best. He adds that 2010 will not be much different than 2009, as lenders will remain cautious.