Germany's listed Vivacon in acute liquidity crisis, negotiating with banks; remaining founders leave board

Cologne-based listed property group Vivacon has announced that against the background of the ongoing capital market crisis and the difficult market environment, it has encountered an acute liquidity crisis. It is currently negotiating with creditor banks on extension agreements and the opportunity for an extrajudicial restructuring aimed at prolonging financings coming due this year. The concept and planned restructuring envisage short-term fund-raising by sale of assets and possibly investments, as well as further cost reduction measures. Against this background, the company has cut the number of board members and applied for a segment change on the Frankfurt Stock Exchange to the General Standard from the Prime Standard - a move that means it can omit quarterly reporting. The group will henceforth publish interim statements. The publication date of 2008 consolidated financial statements remains uncertain. Separately, Vivacon said it has signed a sales contract with an international investor on a part of its development business. This should be implemented on 30 June and is conditional, among other elements, on banks approving change of control. The assets encompass five development projects in Berlin, Hamburg and Düsseldorf with a total volume of e345m and around 610 units. The disposal is an important part of the ongoing restructuring of Vivacon. It stands to receive not only the purchase price but to eliminate the drain on liquidity during the construction phase, and trim overheads. Details of the purchase price were not disclosed. (Full story to appear in PFE 124 due to be published on Monday 8 June)