68 million bankruptcy surrounding the Fashion Outlet Parndorf

The FOP real estate ownership beta GmbH based in Parndorf (Burgenland) has loud KSV1870, AKV and Creditreform filed an application at the Eisenstadt regional court to open restructuring proceedings without self-administration. The company, owner of the “Beta” component in the Parndorf Fashion Outlet, has stopped its payments. According to the credit protection association KSV1870, the insolvency proceedings should be opened soon.

The company specializes exclusively in the rental of its components and does not employ any employees.

Background and causes

The Fashion Outlet Parndorf consists of three components – Alpha, Beta and Gamma. The Beta component is currently 71 percent leased. The operators see the causes of insolvency primarily in a difficult market environment: vacancies, slow leasing of vacant space and a problematic project situation have led to a liquidity bottleneck. Negotiations with secured creditors failed.

Debts

According to the company, the liabilities amount to around 68 million eurosabout what 29 million euros attributable to the financing bank.

Continuation planned

Despite the financial difficulties, the company wants to continue operations. The plan is to continue the sales process that has already been initiated in coordination with the creditors secured by the land register. The running costs should be covered by the rental income.

The creditors will receive one Redevelopment plan with a quota of 20 percent offered, payable within two years from acceptance. “The insolvency administrator will check whether this quota is appropriate and achievable,” emphasizes Peter Stromberger from KSV1870.

The case could be a signal to the Burgenland real estate market of how sensitive outlet and retail properties react to weak occupancy rates and market changes.