Blue Tower residential project declared bankrupt

Real estate developer Copper Beech Capital, which has built the Blue Tower residential project in Bucharest, has been declared bankrupt after the court rejected its reorganization plan. The 16-storey block of flats in Colentina area of Bucharest should have been finalized in September last year and was expected to have 156 apartments. 100 of these have already been sold. The investment in the project was of EUR 30 million, with a EUR 14 million loan from Alpha Bank. The next phase in the process is to evaluate the existing building, only 75 percent finalized, and sell it, most probably by public auction, according to Romanian media. The liquidation company will also seek for an investor willing to put an extra EUR 5 million to finalize the project. Copper Beech entered insolvency in 2009, with an accumulated debt of EUR 27 million. Apart from Alpha Bank, with EUR 14 million to recover from the real estate developer, construction firm Total Confort also has to recover EUR 1.5 million. In addition, buyers of the apartments will also have to recover their down payments. Copper Beech was planning to develop EUR 1 billion in real estate projects, according to its announcements when it started activity, in 2008. The company is owned by British investors, among which Diwaker Singh, former head of Zapp in Romania. Romania has started to see more insolvencies and bankruptcies in real estate, after more than two years of crisis on this segment. The most recent one was the insolvency of City Mall shopping center in Bucharest. editor@romania-insider.com