* Property developer seeks asset sales to raise cash
* To hold talks with creditors, investors
* Shares halted in Prague, fall 13.5 pct in Warsaw
(Adds analyst, background)
By Jason Hovet
PRAGUE, March 26 (Reuters) - Orco Property Group <>
(OPG) filed for protection from creditors, winning breathing
space in its ongoing bid to raise fresh funds by unloading
assets and tapping investors, the loss-making real estate
developer said.
The Luxembourg-registered developer, which delayed the
release of its annual accounts earlier this month, also needs to
refinance 88 million euros of debt falling due this year.
Orco <ORCO.PA>, which has its main office in France but
operates in central and eastern Europe, said it will open talks
with creditors and potential investors with a view to shoring up
its balance sheet.
The protection order, filed with a French court, is valid
for a renewable six-month period, Orco said.
"Backed by (the protection), the management of OPG will have
the time needed to restore the group's financial health and to
advance the discussions we have already started with our
financial partners," CEO Jean-Francois Ott said in a statement.
The global downturn has stung central Europe's property
markets and led banks to tighten lending conditions, hurting
developers who had aggressively invested in the region.
Orco has office, residential and hospitality development in
the Czech Republic, Slovakia, Hungary, Poland, Germany and
Croatia.
It said it would start to refocus on key cities such as
Prague, Berlin, Warsaw, Budapest and Bratislava, avoiding
projects in regional towns.
The group reported full-year revenues of 299 million euros
($405.9 million) in 2008, up 10 percent, and said it expected
revenue of at least 277 million euros this year. Orco plans to
release full-year earnings by the end of March.
It sold assets worth 186 million euros last year, it said in
the statement, and refinanced 100 million euros of the 188
million euros of debt that is due in 2009.
Analysts said the court protection might give the company
the time it needs to sell non-performing assets and renegotiate
credit.
"They also need to find an investor to get cash," Ceska
Sporitelna analyst Petr Bartek said.
The 18-year-old Orco's founder and former main shareholder
Ott was forced to cut his stake to 1.6 percent from 10 percent
last autumn after a steep fall in the group's shares forced him
to sell some stock.
Several shareholders have called for Ott to step down.
Orco shares have shed 89.4 percent of their value in the
last 12 months, much worse than a 45.8 percent drop in Prague's
main index <>.
The Prague bourse said it suspended Orco shares, which also
trade in Paris, Warsaw and Budapest, on Thursday. The stock fell
13.5 percent in Warsaw <ORCO.WA> by 1257 GMT.
(Additional reporting by Jana Mlcochova; Editing by Sharon
Lindores, John Stonestreet)
