Asmita Gardens, suspended for 20m-euro debt

The construction site of the 800-apartment Asmita Gardens residential project in Bucharest, which will consist of seven tower blocks with 16, 20 and 24 floors was suspended indefinitely by Austrian builder Strabag on Tuesday, as a result of Asmita Gardens running late on its payments since November 2008, according to market sources. This is one of the largest residential construction sites to have suspended works since the beginning of the year. Asmita Gardens has 20 million euros in overdue debt to Strabag, with the project’s developer currently being in advanced negotiations with Alpha Bank to secure the funding. Asmita Gardens is held in joint venture by Indian-based Asmita and by British investment fund European Convergence Development Company, while Alpha Bank funded the execution works. According to market information, Alpha Bank’s Greek parent bank is to approve this credit by the end of this week. “We confirm that Strabag has decided to stop works due to payment being late. The debt amounts to 20 million euros. We want to continue this project as soon as possible, but we need a bank guarantee for these debts at least,” Diana Klein, who is in charge of communication at the Strabag group, told Ziarul Financiar. The group boasts 13.7 billion euros in annual turnover.