Shares of Prague-listed property company ECM Real Estate Investments fell up to 7 percent at the start of Monday’s trading session after one of the company’s bondholders requested early repayment. In a report issued the evening of April 1, ECM stated that Glancus Investments had asked for early repayment of bonds with a nominal value of Kč 137 million.
In the first half of 2010, the debt-ridden developer fell into negative equity. While this situation allowed for bondholders to demand early repayment, an agreement on a bailout plan was reached at the November general meeting. The debt restructuring deal was supposed to be formalized early in 2011.
“The request for early redemption could indicate that not all bondholders had joined in the agreement,” Pavel Ryska, an analyst at brokerage Atlanitk finanční trhy, said in a note Monday. He added that the news for ECM is negative.
Earlier this year, Komerční banka dropped coverge of ECM due to what it saw as dim prospects for the company to continue operating independently, as well as pointing out that approval of the debt restructuring agreement by creditors was not binding. ECM and Central European Media Enterprises (which trades under the CETV ticker) were the worst performers on Prague’s PX Index of the final quarter of 2010.
Together with the bond repayment news, ECM announced that Austrian real estate company CA IMMO has filed a claim regarding the enforced sale of City Deco. ECM stated that a general meeting would be convened to decide on further steps.
