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Blue City. Shopping center in Warsaw with financial problems

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Blue City, the company managing the shopping center at Aleje Jerozolimskie 179 in Warsaw, filed a court application to open accelerated arrangement proceedings due to the lack of an agreement with the banks to extend the financing, Blue City announced on Thursday.

“The company Blue City (…), managing the shopping center at Aleje Jerozolimskie 179 in Warsaw, filed an application with the District Court for the Capital City of Warsaw in Warsaw to open accelerated arrangement proceedings. The company's management board made such a decision due to the lack of agreement with the consortium of banks. regarding the extension of the loan repayment date in the total amount of EUR 156 million,” the statement said. It was added that the opening of accelerated arrangement proceedings is intended to protect the shopping center from bankruptcy. As indicated, at the same time, this decision will allow the jobs of over 1,500 people currently employed in the shopping center to be protected, and 200 tenants to continue their operations under unchanged conditions.

Banks' refusal to extend loan repayment

The announcement also stated that in 2015, a consortium of financial institutions: ING Polska, Nationale Nederlanden, Santander, BNP Paribas, Postbank/Deutsche Bank and Bank of China provided financing to Blue City in the amount of EUR 185 million. “In total, we have already repaid over EUR 80 million to the current consortium, most of which is interest. There were no delays in the repayment of quarterly installments. After years of the pandemic, we have been observing an increase in visitor traffic in our shopping center, so we were totally surprised by the information about the refusal to extend the loan repayment deadline. ” – said Yoram Reshef, vice-president of Blue City, quoted in the announcement. “Even in such a short time, we managed to arrange additional financing from other banks, but they set a condition that ING would remain the leader of the consortium. ING Bank did not agree to this. (…) We firmly declare that we want to repay the entire debt, by finding new financing or selling the center on terms that reflect its value,” he added. Currently, there are approximately 200 tenants in Blue City, who rent over 96 percent of the space. commercial space of the facility. A total of approximately 1,500 people work in the shopping center. At the same time, the company manages office space of over 33,000 square meters, located in a shopping center complex.

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Main photo source: Shutterstock

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