Greek developer Vovos to sell assets, cut debt

Δημοσιεύθηκε: 10 Μαρτίου 2009 - 11:02

ATHENS, March 10 (Reuters) - Greece's largest real estate developer Babis Vovos plans to sell assets and extend the maturity of its bank debt to cope with a delay in the construction of its biggest project, it said on Tuesday.

The company said in a note it would sell two tourist properties in Greece in a bid to cut its short-term bank debt of 201 million euros ($254.1 million) by about a quarter, ahead of a court ruling on the building of a shopping mall.

'We are proceeding with a restructuring of our capital structure in order to further improve the efficiency of the group's cashflows until the final court decision is taken,' Babis Vovos said.

Last December a temporary court injunction halted the development of a shopping mall in Athens' underdeveloped Votanikos suburb, after a group of residents challenged the project on environmental grounds.

The company planned to complete the 250 million euro project by year-end and was banking on it to counter a slump in Greece's building sector.

A final supreme court ruling is expected in the next few months after Vovos' appeal.

Babis Vovos said it expected to raise 55 million euros from the asset sale, including a downpayment of 15 million euros, and added it was in advanced talks with creditors to lengthen the maturity of the remaining short-term debt.

The stock -- which has lost 74 percent so far this year due to the delay in the Votanikos project -- was down 1.3 percent at 2.28 euros at 1029 GMT. The DJ Stoxx construction index was up 2.51 percent.

Vovos said last week it would not distribute a dividend for 2008. New building permits fell by 15.4 percent in Greece last year.

($1=.7909 Euro)

(Reporting by Angeliki Koutantou; Editing by Jon Loades-Carter) Keywords: VOVOS/DEBT

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