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Orchid Developments Group Limited

  

Portfolio review 

 

Orchid Developments Group Limited ('Orchid' or the 'Company'), an established property developer in Bulgaria, today announces an update on its current property portfolio. 

 

On 22 September 2008 the Company announced interim results for the period to 30 June 2008. Since then the world's economic climate has changed dramatically; global capital markets and banking systems have been in crisis. This has made it more difficult for Bulgarian real estate developers to access the capital required to start building work on new projects, continue development of existing projects, or to sell or let properties on commercially reasonable terms.

 

In response to these events, the board of directors of Orchid (the 'Board') has considered it prudent to review the Company's entire portfolio together with the proposed strategy and completion schedules for individual projects.

The Board has decided to focus primarily on the completion of the following projects: the mixed use Orchid Gardens Varna project; the retail space of the Varna Mall Multi Complex; the Orchid Hills Sofia residential project; and the Orchid Hills Varna residential project. All four of these projects are funded either by bank facilities or internal cash resources.

Set out below are the Board's proposals in relation to each major project:

Orchid Gardens Varna - The Company has financing in place for the development and intends to complete this project as initially anticipated.

The Grand Mall, Varna - The Company has financing in place for this project and has recently signed leases with well known international retailers, including Zara, Pull & Bear, Bershka, Gap and Mango, and is also in advanced stages of negotiation with other tenants for additional spaces. The Company has resolved to focus on completing the construction and leasing of the the retail portion of the Varna Mall Multi Complex and to postpone the works on the office towers. 

Orchid Hills Sofia - The Company has obtained the usage permit for the first phase (177 apartment units) of this residential development (97% sold). However, the Board has decided to delay the implementation of Phase II of this project, which will be considered at a later date. 

Orchid Hills Varna- The construction of stage I is completed and stage II is expected to complete in May 2009. 70% of both stages are now sold. The Company has commenced selling of stage III with 56 apartments sold out of a total of 135 in this stage. Buyers continue to commit 20% deposits on signing the preliminary agreements with the balance paid during construction.

Orchid Business Park, Varna - The Board of Directors is currently undertaking a review of this project and a further announcement will be made in due course.

Yavor Hotel - As announced on 5 January 2009, the sale of Yavor Zlatni Piassatci EAD, a subsidiary company which owns the Yavor hotel, has now completed. 

Enquiries: 

 

Orchid Developments Guy Meyohas	+359 2 981 9955
Shore Capital and Corporate Limited Dru Danford	020 7408 4090
Citigate Dewe Rogerson Sarah Gestetner Nicola Smith	020 7638 9571

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