The Bucharest court has approved the insolvency of the Armonia Braila shopping center owner Red Project Three, a company of the Red real estate development group. The shopping center was closed down in August 2009, after only several months from opening, due to unsatisfying results.  At the time, the developer was announcing plans to reposition the project and turn into into a discount-oriented one. It was expected to re-open in 2011.

The Bucharest court has appointed Casa de Insolventa Transilvania judiciary administrator for the Red Project Three company. The company's main creditor was Volksbank and the value of the debt reached around EUR 37 million, according to Romanian media. Volksbank has granted a EUR 47 million loan for the development of the Armonia Braila mall. Armonia Braila featured 47,700 sqm of leasable area and was part of a planned chain of similar projects across Romania.

Red group has several other real estate projects in different phases, on the retail, offices and residential segment in Bucharest, Iasi, Satu Mare, Constanta, Arad.  The main shareholders in Red are Spanish investment fund GED and US fund Warburg Pincus.

editor@romania-insider.com