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Long-term financing for Bulgarian real estate projects
Deal fills gap in local funding for property market
An innovative long-term debt and equity deal put together by the EBRD will
help international real estate developers build new property projects in
Bulgaria.
The Bank is lending up to €29 million, and investing up to an additional €1
million in equity in selected projects, to finance the construction of five
projects undertaken by Orchid Developments Limited near the Black Sea resort
of Varna and in the Bulgarian capital, Sofia. The projects include two office
and retail centres in Sofia, a hotel near Varna, a residential complex in
Sofia and another one in Varna. The Bank is syndicating up to half the loan to
commercial banks.
The loan will include revolving funding and tranches with varying maturities,
ranging from five to 10 years. In addition, the Bank will exercise an option
to acquire an equity stake of up to 10 percent in some of the projects.
The complex structure of the deal breaks new ground for the financing of real
estate developments in Bulgaria, providing long-term funding that had not been
previously available to the sector, said Ilaria Benucci, Director of the
EBRD’s Property and Tourism team.
It also bundles the projects in a portfolio of assets that makes them
potentially attractive targets for international institutional investors, thus
encouraging the development of a secondary real estate market in the region,
Ms Benucci added.
Orchid is an investment holding registered in the Cayman Islands. The
founders, two successful International developers, Guy Meyohas and Ofer
Miretzky, have been active in the Bulgarian market since 2000. Orchid has
received approximately €17 million of equity funds from Shore Capital and its
clients.
Orchid will use local construction companies and materials from local sources
to help build the properties.
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