TIDMOCH

RNS Number : 3299S

Orchid Developments Group Ltd

29 November 2012

29 November 2012

AIM: OCH

Orchid Developments Group Limited

('Orchid' or the 'Group')

Amended Credit Facility Secured for Orchid Center Varna

Orchid Developments Group Limited, the Bulgarian focused property developer and investor, announces that its subsidiary Orchid Centre Varna EOOD ("Company") has entered into an amendment agreement with Raiffeisenbank (Bulgaria) EAD ("Bank") to amend certain terms of the Company's existing EUR3.1 million credit facility agreement ("Facility Agreement") related to its suspended business center project ("Orchid Business Center Varna"). As previously announced, due to the economic downturn, the Board decided not to proceed with the construction of this project until market conditions improve.

Under the term of the amended Facility Agreement, the Company has agreed, inter alia, to:

(1) suspend the payment of the principal amount due (approximately EUR3.1 million) until 15 May 2013;

(2) suspend the payment of the total accrued interest to date, amounting to EUR0.42 million, until 15 May 2013;

(3) accrue interest on the principal amount outstanding for the current period until the repayment date (15 May 2013); and

(4) during the suspension period, the Company will seek to sell Orchid Business Center Varna at a price acceptable to the Bank. If the asset is sold at a price which is not sufficient to cover all amounts (principal and interest) due under the Facility Agreement, the remaining balance will be written off by the Bank and the Company will be released from its obligation to pay such balance.

All of the Group's major projects under development are financed by committed non-recourse facilities ring-fenced at the project level and the Facility Agreement does not provide the Bank with any recourse to the Group. If Orchid Business Center Varna is not sold or amounts due under the Facility Agreement not paid, the Bank's legal recourse is limited to the real estate property owned by Orchid Center Varna EOOD only and to developments existing thereon.

Commenting on the amended credit facility, Guy Meyohas CEO of Orchid Developments said:

"Orchid continues to demonstrate its good relationships with its banks. In the current tough market conditions, we are cooperating closely with the banks in order to achieve the best outcome for both parties. The Group is continuing to make progress restructuring its facility loans relating to some of its projects while seeking opportunities to realise assets at realistic valuations."

Ends

 
Contacts: 
Orchid Developments 
 Guy Meyohas                            +35 92 981 9955 
 
  Shore Capital and Corporate Limited 
  Bidhi Bhoma / Toby Gibbs                +44 20 7408 4090 
 
  MHP Communications 
  Reg Hoare / Vicky Watkins               +44 20 3128 8100

Notes to Editors:

Orchid Developments Group Ltd (OCH.L), which listed on the AIM market in July 2005, was established with the aim of generating value for shareholders by investing in real estate and leisure business opportunities initially in Bulgaria.

The company is active in all principal sub-sectors of the Bulgarian real estate and leisure markets and currently holds three residential and six commercial property developments in Sofia and Varna. Its principal investment is the Grand Mall in Varna, a leading shopping mall in Bulgaria.

This information is provided by RNS

The company news service from the London Stock Exchange

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