PRX: Reverta pays additional EUR 22.5 million to the State Treasury
In 2015 the biggest challenges for Reverta were the unfavourable market conditions caused by the new geopolitical situation. From the viewpoint of loan workout and recovery, and asset disposal this has been the most difficult and complicated period in Reverta’s life since August 2010 when the recovery of State aid paid to Parex banka was commenced.
Solvita Deglava, the Chairperson of the Management Board of Reverta, stresses: `During the reporting period, Reverta’s performance, including the amount of funds to be repaid to the State Treasury, was largely dependent on the completion term of several big deals. As a result of increased caution exercised by investors it has become more difficult to find buyers for large real estate objects and, besides, evaluation process of deals has become more meticulous and time consuming than before. As Reverta has already disposed of the largest portion of its investment projects in the last five years, the remaining deals require complex and individual approach to be completed.’
Since 1 August 2010 Reverta has recovered a total of EUR 639.5 m. The State has received from Reverta a total of EUR 580.8 m in the form of various payments, of which EUR 336 m was paid to the Treasury.
Although Latvian real estate market does not show any significant increase of activity, deals, though mostly with low value properties, are being concluded and within nine months Reverta received EUR 11.2 m from sales of real estate properties. Transaction amounts vary from several thousand euros for land properties to 30 to 100 thousand euros for dwelling properties. As planned, Reverta’s real estate portfolio has significantly decreased and the most attractive properties have been already disposed of, therefore Reverta is working actively to arouse interest of buyers. At the end of the reporting period, there were approximately 255 objects put on sale, part of which are land properties.
During the first nine months of this year, Reverta’s loss did not exceed the plan and was in the amount of EUR 32.6 m, as compared to EUR 31 m in the first nine months of 2014. As previously, the loss comprised, first, interest expense on issued bonds (EUR 6.7 m) and, second, provisions for the impairment in asset value. According to the Restructuring Plan, loss was always to be part of Reverta’s operation.