THREATENED BY FORECLOSURE The Cocor store, put up for sale for 50 million Euros

• The company has to repay a loan to the Romanian Commercial Bank (BCR)

• Florea Popescu: The company is considering a bonds issue of at least 3 million Euros

The Cocor store has been put up for sale for a price of 50 million Euros, together with other buildings of the company, after the shareholders of "Cocor" (COCR) have agreed to the proposal, in the General Shareholder Meeting of July 16th, according to a report sent to the Bucharest Stock Exchange (BSE).

The move comes after the approval of the strategy for the restructuring of the company proposed by the Board of Directors (CA), which stipulates the sale of assets under terms which are advantageous for the company, in order to fully or partially repay the loan or for the partial or total refinancing through the banking system, financial institutions or in any other manner available, including by issuing bonds or by renegotiating the loan with BCR, the report states.

At the end of last year, the shareholders of "Cocor Bucureşti", the company which manages the commercial center with the same name located in Bucharest, have approved the short term restructuring of a mortgage loan of 19 million Euros, taken out in 2009 from BCR and which was used for the renovation of the store.

The investment in renovating the commercial center cost 24 million Euros, of which 19 million came in the form of a loan from BCR.

Last year, the company's revenues were lower than expected, because they were unable to find enough tenants for the Cocor store.

Following the talks with the representatives of BCR, the conclusion that, if an amicable solution wasn't found, the company may see a foreclosure, a report sent to the BSE in the beginning of June states. The same document also states that BCR, as well as the representatives of Cocor SA, are looking for a plan to reposition the store, as well as to obtain a reprieve from the payment of the overdue loan repayments.

The AGEA has also approved the sale of other properties of the company, including the BIR building, two buildings located on the Unirii Avenue, one located in Ştefan cel Mare Road, and at 1, Foişorul de Foc street.

In the case of the BIR building, this will result in the sale of its individual wings, according on their land registry numbers.

Compared to the proposed price, the President of the Board of Directors, will be allowed to sell, with the approval of the Board of Directors, at a price which may not go below 50% of the proposed amount. Any discount of less than 50% can only be made with the decision of the General Shareholder Meeting (AGA).

The payment for the building may also be made in installments, provided a 25% advance of the negotiated value of the buildings is paid.

The Chairman of the Board of Directors has also been authorized to sell any shares which "Cocor SA" owns in listed companies, as well as sell at their par value the receivables against the companies within the group, the press release states.

The report also presents the option of using all of the aforementioned assets of the company, to be used as collateral, real estate mortgage or pledges in the case of stock or receivable, for the purpose of obtaining a total or partial refinancing of the loan taken out from BCR or the renegotiation of the loan agreements of BCR, in order to avoid them coming to an early maturity and the danger of a foreclosure of the company.

According to Mr. Florea Popescu, the Chairman of the Board of Directors, another option would be to have an issue of bonds of at least 3 million Euros.

He said: "SC Cocor SA is currently reviewing all the possible alternatives for the partial repayment of the loan taken out from BCR. At the General Shareholder Meeting, several options for refinancing and rescheduling options for the loan were discussed, including an issue of bonds of a minimum of 3 million Euros, as well as the option of selling some of the 11 million real estate assets in Bucharest which the company currently has in its portfolio. The mandate granted by the General Shareholder Meeting is a general one, and the final decision on the refinancing, rescheduling or the sale of assets will be based on the option which will be the most sustainable for the company".

The Agenda has also included the election of the members of the Board of Directors. Thus, the following appointments were made: "SC Popescu Management SRL", through Popescu Florea, "SC Quality Concept Management SRL", through Pricopie Claudiu, "SC Turnover ABC SRL" through Besliu Aurel, and "SC Staar Rating SRL", through Pavel Daniela, Oprea Cristina, Simionescu Dan and Bălan Constantin.

• Cocor has revoked the decision to award the members of the Board of Directors

The shareholders of "Cocor SA" have approved the revocation of the decision of the Extraordinary General Shareholder Meeting of Shareholders of December 2010, which stipulated the payment of bonuses to the members of the Board of Directors equal to 10% of the amounts saved compared to the initial budget allocated for the development of the "Cocor Store".

Also at the Extraordinary General Shareholder Meeting, the shareholders have decided to set up a branch of "Cocor SA", according to the report.

The Cocor store, located in the center of Bucharest, was reopened in October 2010, after two years of renovation works and has a total surface available for letting of 10,000 square meters.

According to the latest reports, investment fund Broadhurst owns 13.32% of the shares, SIF Transilvania owns 10.24% of the shares, and SIF Muntenia owns 10%. Shareholders also include Daniel Stoica (14.66%) and Liviu Ursan (14.83%).