British commercial property investor Carpathian Plc said on Tuesday it agreed to sell some of its units that own the development sites of Arad and Cluj in Romania for „nominal sums.” Arad and Cluj, which have significant debt obligations attached, are in breach of certain banking covenants and the company is not prepared to commit any further central funds to these projects, Carpathian said.As part of the deal, outstanding loans made by Carpathian to Arad and Cluj would be assigned to the buyers.
„The significant operating costs of managing the developments were no longer justified, particularly given the size of the associated debt drawn down against the assets and underlying property values in the region,” Chairman Rory Macnamara said in a statement.
For the year ended Dec. 31, 2008, Arad and Cluj reported a loss of 30.9 million euros.
Carpathian shares closed at 0.145 euros on Monday on the London Stock Exchange.
