BCR sells the Silver Mountain complex at a loss

BCR, part of Erste Group, has appointed Knight Frank România to sell the Silver Mountain complex of Poiana Braşov. According to market sources, the price requested by BCR is 35 million Euros, plus VAT. In 2014, the bank has acquired the luxury real estate complex Silver Mountain, put up for sale by Euro Insol, the liquidator of developer INR Management Real Estate, for a price of 45.5 million Euros, meaning that the bank's exposure to this project is 40 million Euros. The bankruptcy has been requested in the beginning of 2014 by BCR itself, the main creditor of the project, with over 85 million Euros in receivables.

Silver Mountain of Poiana Braşov, the biggest leisure project in Eastern Europe, is developed on a surface of 23.6 hectares and comprises four apartment buildings (171 units, from studios to penthouses), 2,600 sqm usable surface of retail areas, which include a multifunctional building, consisting of a restaurant (with a capacity of 140 people), a club and a spa&fitness center, with underground parking lots.

The project has been developed between 2008-2011 by INR Management Real Estate, owned by businessman Dan Fischer, deceased in 2012. In the beginning of 2014, INR Management Real Estate was entering bankruptcy, and BCR has acquired the company, and implicitly the project, following the auction held by Euro Insol, receiver controlled by Remus Borza.

The existing buildings span two and a half hectares of land, and investors "will have the opportunity to continue developing the sports and leisure offers available, on an open land surface of 23.3 hectares", according to the representatives of Knight Frank Romania.

"Poiana Braşov is one of the few mountain resorts in which demand from tourists is high, and supply is relatively limited. Mixed projects such as Silver Mountain are almost inexistent on the market, given the rising investment activity, and we expect the sale to generate a lot of interest from investors. Over the last two years, the volume of investments in Romanian real estate has exceeded 1.4 billion Euros, based on strong economic growth, of more than 3%, and we expect it to increase at the same rate in the coming years", the representatives of the real estate consultants say, who are now trying to find a buyer for the property of Poiana Braşov.

Remus Borza, the head of Euro Insol, was saying that BCR intended to continue developing the Poiana Braşov project. The project, consisting of 171 unsold apartments, commercial spaces, 176 parking spots, restaurant, club, spa&fitness and a plot of land 20 hectares, was appraised at approximately 50 million Euros, according to an evaluation made by the consultants of Jones Lang LaSalle.

INR Management Real Estate, which was controlled by a Cyprus offshore behind which, together with businessman Dan Fischer (deceased), are Prince Albert of Monaco and Ion Ţiriac, has begun in 2008 the construction of the most luxurious real estate project in Romania, estimated at over 300 million Euros. The developer intended to build a mini-resort, which would feature apartments and villas, a 184-room hotel affiliated with the Raddison SAS chain, two cinemas, a heliport, a tennis club and an 18-hole golf course set up on a plot of land of 440,000 square meters. The 15 villas with 600 apartments of the complex were going to be built on a surface of 88 hectares. The economic crisis has prevented the completion of the project. At the end of May 2013, Fisher's sister sold INR Management to Asian investment fund UNI-ASIA Holding.

According to a report by the receiver, the main causes of the insolvency of INR Management which it has uncovered were the exceeding of the execution deadlines, very high consulting services costs, artificially inflated through the large number of identical or similar consulting contracts and which overlap in time, the consulting contracts concluded with affiliated persons and acquisitions of assets from affiliated persons at prices above the market. Former tennisman Ilie Năstase and former finance minister Sebastian Vlădescu are among the beneficiaries of contracts that were detrimental to the company.