In Exchange For Sponsorship, Public Television Settles Litigation With Alexander Hergan

The Romanian Television (the public television company - TVR) and Bucharest-based construction company Avrig 35 have concluded a sponsorship contract and a commodatum (bailment) contract consequently to which TVR has terminated its legal contestation of the construction permit released by The Bucharest Sector 1 Mayoralty for the building being erected at 15 Charles de Gaulle Square, known as Charles de Gaulle Plaza. Late last year, TVR vehemently protested the project of constructing an office building in the respective location in Charles de Gaulle Square - a nearly 34 million USD investment by Avrig 35. TVR claimed that the building (already under construction by then) would be tall enough to obstruct broadcasts from The TVR Tower. TVR officials demanded that the blueprints be re-done so as to reduce the height of the problematic building. TVR took the litigation to court, requesting that the construction permit be revoked.

Considering the risk of a lengthy trial ending with an uncertain winner, Avrig 35 opted for settlement negotiations, especially in light of the fact that the investment was financed with a loan from HVB.

TVR representatives told "Bursa" that Avrig 35 had offered to settle the litigation out of court through two contracts ensuring the technical condition necessary for TVR broadcasts. Avrig 35's offer, which TVR eventually accepted, consists of a sponsorship contract including two broadcasting relays and a 20-year commodatum contract under which TVR is gratuitously granted the use of a 12 square meter room in Charles de Gaulle Plaza to accommodate broadcasting equipment, plus a six square meter platform upon which to install the relays.

The value of the sponsorship contract remains a mystery as TVR officials refused to disclose any information about the contract saying that Avrig 35 was exclusively entitled to decide whether to make release such information. In turn, Avrig 35 representatives declined comment on the deal saying their communication strategy would not allow it.

The 16-floor Charles de Gaulle Plaza, known to be the future head office of Connex (the company will occupy approximately 40 percent of the building) will measure 40,000 square meters and include a luxurious restaurant, a health center, a cafeteria and an underground parking lot of 340 spaces on five levels. Avrig 35's creditor, HVB, will occupy 25 percent of the building.

Avrig 35 is one of the leading real estate developers in Bucharest. The company was named after its first real estate project, developed for Connex, which is located at 3-5 Avrig Street, Bucharest. Besides Charles de Gaulle Plaza, Avrig 35 is building a new headquarters for The Canadian Embassy in Bucharest. This project is implemented through Nordic Pioneer SRL and is worth some four million dollars. Avrig 35 is 99.9% percent property of F&G International BV Netherlands.