The Prague Stock Exchange (PSE) has indefinitely suspended trade in shares of ECM Real Estate Investments, one of the biggest real estate development companies in the Czech Republic, following on a declaration of its insolvency by a Prague court on Tuesday.
“Based on information from Municipal Court in Prague about the bankruptcy of the company ECM Real Estate Investments and in harmony with trading rules of the Prague Stock Exchange, trading with all investment instruments of the issuer ECM Real Estate Investments will be suspended for an indefinite period, effective from May 25, 2011,” the bourse said in a statement.
ECM had filed for bankruptcy on May 17, saying it wanted to push through a reorganization of its activities in a bid to settle with creditors.The developer had total liabilities of €233.66 million at the end of the first quarter and a negative equity of €85.08 due to ongoing losses. Among the major creditors are Česká spořitelna, Erste Bank and Volksbank. The court should rule on the reorganization plan within three months, according to the filing.
“Bankruptcy was filed after Česká spořitelna handed up a proposal for insolvency proceedings due to the company’s debts being past their due date. Later, Volksbank, Glancus Investments and others joined the proposal and then ECM itself submitted the insolvency proposal,” Atlantik analyst Pavel Ryška said in a market comment Wednesday. “The fact that the company itself joined the proposal was the reason the court declared bankruptcy.”
The suspended instruments are: ECM (ISIN LU0259919230), ECM 5,00/11 (ISIN XS0319645981), ECM VAR/12 (ISIN CZ0000000211), ECM WARRANTS (ISIN XS0258854495), ECM WARRANTS 2007 (ISIN XS0319646286).
