19/10/2015 09:49
The state and the banks received the lion's share of €80 mn collected by Orfanides administrators, as unsecured creditors prepare lawsuits claiming another € 100 mn.
The former giant of the retail industry with an annual turnover that reached €200 mn, collapsed at the end of 2012, leaving its creditors exposed.
Nearly three years after the company was put under administration, company administrators are still trying to sell its assets.
Michalis Avraam one of the administrators of Orfanides public company, told StockWatch that some properties have been disposed through open tenders and the funds have been distributed to the beneficiaries, ie mortgage lenders and preferential creditors.
"So far €80 mn have been collected from the sale of assets” he said. The bulk of it came from the sale of Nicosia and Limassol malls, an amount of about €58 mn for both malls.
“Of this money we had to pay everything related to government first (property tax and other taxes) and then the banks at which those buildings were mortgaged. This had to be done in order to be able to transfer the property to buyers and collect the money" he said, adding that in some cases money was not enough to cover amounts needed for banks.
In cases where it was possible to repay banks, amounts left were used to repay preferential creditors such as staff, provident funds, social insurances, VAT, local authorities and unions.
Mr. Avraam noted that some properties are still on sale such as the supermarket in Polis Paphos, properties in Dromolaxia and Vergina which are mortgaged for the benefit of a banking institution and a hired mortgage in Larnaca which did not get the government’s approval for its sale.
Administrators and recipients try to sell the company's assets based on floating charges signed between the company and the banks.
Liquidators
In addition to administrators, the liquidators of the company have also been working intensively.
The provincial Larnaca court upheld on 15 September the appointment of two liquidators Antonis Vassiliou and George Maloney licensed insolvency consultants in Cyprus, who were selected by the creditors' meeting on 29.07.2015. It also ratified the appointment of a five-member supervisory committee of creditors.
Antonis Vasiliou is a director of consulting services and insolvency services at BakerTilly Cyprus and George Maloney is head of consulting services and insolvency services at Baker Tilly Ryan Glennon (Ireland).
In his statements to StockWatch, Mr. Vasiliou said that the liquidators’ job, if there are no assets in control of the administrators, is to make a research in the operations and transactions of the last three years and in the company's financial statements.
"We have been in contact with various stakeholders related to Orfanides, such as former auditors, lawyers, the CSE, the SEC, the official receiver and others, to give us information, while we also requested information from administrators," he said.
Mr. Vasiliou noted that after the outcome of the investigation and if it is justified, it is left up to the creditors to take legal action.
The chairman of the association of unsecured creditors of former Orfanides Louis Klappas, told StockWatch that around 700 unsecured creditors are seeking more than €100 mn.
"We have started intensive work to document data of the last three years regarding the company’s development 12 months before it closed down and the work of the company’s administrators. Creditors are ready to proceed with legal action against anyone found to be responsible for the poor and irregular operation of the company", he said.
The former giant of the retail industry with an annual turnover that reached €200 mn, collapsed at the end of 2012, leaving its creditors exposed.
Nearly three years after the company was put under administration, company administrators are still trying to sell its assets.
Michalis Avraam one of the administrators of Orfanides public company, told StockWatch that some properties have been disposed through open tenders and the funds have been distributed to the beneficiaries, ie mortgage lenders and preferential creditors.
"So far €80 mn have been collected from the sale of assets” he said. The bulk of it came from the sale of Nicosia and Limassol malls, an amount of about €58 mn for both malls.
“Of this money we had to pay everything related to government first (property tax and other taxes) and then the banks at which those buildings were mortgaged. This had to be done in order to be able to transfer the property to buyers and collect the money" he said, adding that in some cases money was not enough to cover amounts needed for banks.
In cases where it was possible to repay banks, amounts left were used to repay preferential creditors such as staff, provident funds, social insurances, VAT, local authorities and unions.
Mr. Avraam noted that some properties are still on sale such as the supermarket in Polis Paphos, properties in Dromolaxia and Vergina which are mortgaged for the benefit of a banking institution and a hired mortgage in Larnaca which did not get the government’s approval for its sale.
Administrators and recipients try to sell the company's assets based on floating charges signed between the company and the banks.
Liquidators
In addition to administrators, the liquidators of the company have also been working intensively.
The provincial Larnaca court upheld on 15 September the appointment of two liquidators Antonis Vassiliou and George Maloney licensed insolvency consultants in Cyprus, who were selected by the creditors' meeting on 29.07.2015. It also ratified the appointment of a five-member supervisory committee of creditors.
Antonis Vasiliou is a director of consulting services and insolvency services at BakerTilly Cyprus and George Maloney is head of consulting services and insolvency services at Baker Tilly Ryan Glennon (Ireland).
In his statements to StockWatch, Mr. Vasiliou said that the liquidators’ job, if there are no assets in control of the administrators, is to make a research in the operations and transactions of the last three years and in the company's financial statements.
"We have been in contact with various stakeholders related to Orfanides, such as former auditors, lawyers, the CSE, the SEC, the official receiver and others, to give us information, while we also requested information from administrators," he said.
Mr. Vasiliou noted that after the outcome of the investigation and if it is justified, it is left up to the creditors to take legal action.
The chairman of the association of unsecured creditors of former Orfanides Louis Klappas, told StockWatch that around 700 unsecured creditors are seeking more than €100 mn.
"We have started intensive work to document data of the last three years regarding the company’s development 12 months before it closed down and the work of the company’s administrators. Creditors are ready to proceed with legal action against anyone found to be responsible for the poor and irregular operation of the company", he said.
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