ZF News

Paskany postpones construction of Sheraton hotel in Cluj for a year

Businessman Arpad Paskany, the owner of the CFR Cluj football team, has postponed the construction of the five-star Sheraton hotel in Cluj, an investment estimated at 50 million euros part of the Sigma Towers project until the spring of 2010, because of the delay in raising funding for this project. “The deadline for the first Sheraton hotel in Romania is 32 months from the start of the works, which will most likely begin in the spring of 2010. The reason for the delay in the start of construction works is the financial-banking crisis,” stated Carmen Cojocari, hotels marketing manager of Sigma Towers, a company controlled by Paskany. The construction of the Tower 1 complex, part of the Sigma Towers project, along with Tower 2, will start early next year. The Sheraton Cluj hotel will be located in the Tower 1, and the total investment for the first tower will stand at 135 million euros, with the hotel requiring almost 50 million euros, company officials say. The hotel’s built area will stand at 27,000 square metres. ZF

Highest rise on water market: Perla Harghitei targets 18m-euro business

The producer of Perla Harghitei mineral water, which in the first four months of this year saw the highest production increase out of the top 10 bottlers that use the sources of the National Mineral Waters Company (SNAM), by 33%, targets a 77.3 million-RON (18 million-euro) turnover this year. The company intends to keep up its four-month growth rate for the entire year. “In the first four months of 2009 we recorded a 35% rise in the volume of mineral water and soft drinks sales compared with the similar period of last year. The segment contributing the most to this rise was mineral water Perla Harghitei, especially in large PET containers – 2 and 5-litre bottles,” said Istvan Puskas, sales manager of Perla Harghitei. “This is the result of the current economic situation, with consumers turning increasingly more towards large-volume bottles, due to the better price/quantity ratio they offer,” he specified. The producer, controlled by Arpad Kurko, operates on the Romanian market with mineral water brands Perla Harghitei, Tiva Harghita and Cristalina, and with Allegria juices. ZF

Equest restructures loams for Domo takeover

Investment fund Equest Investment Balkans has started procedures to refinance a 65 million-euro loan contracted from Raiffeisen Zentralbank Oesterreich in order to take over electronics and home appliances retailers Tehnomarket and Domo (TMD). The loan was contracted in December 2008, with a 20 million-euro tranche being repaid on July 15th. In order to do that, Equest lent 8 million euros to TMD, which it secured from selling 16.52% in Uniqa Bulgaria AD. EIB took another 21 million-euro loan from a Bulgarian bank, due in 12 months’ time, which was then transferred to TMD. EIB acquired Tehnomarket (in Bulgaria) and Domo via its Lynx Property subsidiary, and turned them into the largest electronics and home appliances retailer in South-Eastern Europe. According to the report published on the London Stock Exchange by EIB, TMD posted sales worth 610 million euros last year. Electronics and home appliances retail chain Tehnomarket and Domo stores hold the top position on home appliances retail on the Eastern-European market, while in Romania TMD holds the second position, with 207.5 million-euro sales, and was the only retailer posting net profit in its sector. ZF

Mandatory pension funds turn to corporate bonds

Mandatory private pension funds (2nd pillar) had only 8% of the money invested in bank deposits at the end of June, compared with June 2008, when 43% of placements were in deposits. A large part of the money in deposits has migrated towards corporate bonds (listed on foreign stock exchanges), amid a significant rise in yields for such bonds since the autumn of last year. The share held by corporate bonds in the overall portfolio of pension funds rose to 27%, from 7% in June last year. “After the bankruptcy of Lehman Brothers (in September last year), secondary market bond yields were on the rise,” says Horia Braun, investments manager of ING Fond de Pensii. Investments in shares went up against 2008, from 1% to 4%, but, since a higher risk is involved, they are approached more carefully by pension funds. “The financial crisis made funds be more cautious when it comes to making investments. We tried to keep away from assets with volatile prices. We did not invest massively in shares, it is easier for a smaller fund, but for a fund with large assets, for an “elephant”, it is hard to exit the Stock Exchange if the prices start to fall,” says Horia Braun. The overall assets of 2nd pillar pension funds at the end of June amounted to 1.5 billion RON (357 million euros); they rise based on the monthly mandatory contributions. ZF