Herastrau Imobiliare failed in its attempt to raise 7 million euros from the market through an issue of bonds, in order to develop a residential project, because it did not manage to sell enough bonds to obtain the approval of the National Securities Commission (CNVM).
"The bond issue was a failure. The investors'' lack of interest in our offering does not prevent us from achieving what we set out to. We are now reorganising our operations and are in talks with foreign investors over ways to fund the further activities of our company. There is also the possibility of self-funding our investments," explained Janos Miklos, Herastrau Imobiliare''s general manager.
He did not specify the value of the bonds subscribed by investors. The issue prospectus stipulated a minimum of 50 subscriptions, a threshold that was not reached, which is why the issue was considered a failure. The value of subscriptions stood at less than 1 million euros, sources on the capital market say.
The issue concerned the sale of 250,000 corporate bonds at a price of 100 RON. The repayment of the bonds would have been made in two years and the payment of the coupons would have been possible every six months at a variable EURIBOR rate for six months plus 7.5%. The funds would have been used for the acquisition of a plot of land in view of developing a residential project in northern Bucharest.
"We do not intend to release another bond issue," Miklos said.
The majority shareholder of Herastrau Imobiliare is Engelhorn Holdings, which in its turn is held by Santer Establishment, registered in Liechtenstein. The majority shareholder of Santer is Peter Nagy, a Hungarian citizen. Peter Nagy had been previously involved in the business of pharmaceutical software on the Romanian market, which he quit. The issue was brokered by CA IB Securities.
Impact is the only real estate developer to have released a bond issue on the Bucharest Stock Exchange, in 2003, in order to fund its operations.
Herastrau Imobiliare
@ Planned bond issue value: 7 million euros
@ Minimum subscriptions as stated in issue prospectus: 50
@ Planned number of corporate bonds to be sold: 250,000 at a price of 100 RON
@ Issue maturity: two years
@ Total value of subscriptions: less than 1 million euros according to sources on the market.
alexandru.cerchez@zf.ro
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