Orco Property Group has announced that it has applied to delist all of its 17,053,866 ordinary shares from the regulated market of the Budapest Stock Exchange (BSE) on 15 November 2011.
The shares have been listed on the BSE since 2007.
“Orco has applied to delist the Shares (technically known as “translisting" pursuant to the amended regulations of the BSE, whereby the shares are delisted from the BSE while still being traded on at least another regulated market) due to low trading volumes and in order to reduce costs related to the listing and reporting," the company said in a statement.
Subject to the completion of the delisting procedure, the shares are expected to be delisted from the Budapest bourse on 1 December 2011.
Orco’s shares will remain listed on the regulated markets of NYSE Euronext Paris, Prague Stock Exchange, and Warsaw Stock Exchange.
As a result of the changes in the Capital Market Act effective as of 1 January 2011 the shares may be delisted from the BSE by a simple decree by the directorate, i.e. taking the shares somewhere else does not require approval by the general meeting or entail compulsory bidding.
Orco’s move is not entirely surprising. The company had indicated already in its Q4 2008 earnings report that it was considering delisting from the BSE. At that time it would have been obliged to make a bid at more than HUF 8,000 per share, so it did not take concrete steps in this regard. The changes in the law this year freed the company from such obligations, so it is free to leave the bourse now.
Consistent with property market trends the company reaffirmed its CEE positions in 2007, as part of which it issueed 1,304,348 new shares at EUR 115.00 per share. The gross proceeds of the capital increase amounted to EUR 150 million this June. The shares were listed in Warsaw and Budapest.
Orco’s share price reached its peak after its debut at HUF 31,900, from where it dropped lower and lower over the real estate market crisis and the deepening of the company’s problems. The shares were traded in Budapest at HUF 1,155 on Tuesday, which marks a 96% plummet from the record high.
The decline in the share price reflects the turnaround in the company’s operations. After the onset of the crisis funding sources dried up and the financially stressed company that was (overly) focused on massive growth suffered major this. Eventually, it had to file for the restructuring of its bonds and divest its non-core assets.
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