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Czech real estate investor wins Orco Property Group board battle
January 6, 2014 / 4:11 PM / 4 years ago

Czech real estate investor wins Orco Property Group board battle

PRAGUE, Jan 6 (Reuters) - Shareholders at Orco Property Group voted on Monday to remove board members representing two U.S. funds that have battled over strategy with the central European developer's biggest stakeholder.

The vote was a victory for Czech investor Radovan Vitek, increasing his influence at the property company hit hard in the global financial and economic crises since 2008.

Vitek has built up a 30.7 percent stake in what analysts say is a takeover play.

A company shareholders meeting on Monday voted to cut the board to five members from nine, a spokeswoman said.

The new board will include Vitek and another representative of the two companies he controls with shares in Orco. Founder and Chief Executive Jean-Francois Ott, who is also a 9.7 percent shareholder, and two independent members round out the board, the spokeswoman said.

The U.S. funds to lose their places on the board are Alchemy and Kingston, which are the second third-largest shareholders with a combined 23.5 percent stake.

A spokesman for Vitek's real estate group declined to comment.

Vitek, one of the top real estate investors in the Czech Republic, said that Orco needs immediate funding of at least 100 million euros to cover debts and guarantees. He defended a capital increase at an Orco subsidiary in December that helped raise about half that amount.

Alchemy and Kingston criticised the move and have in the past accused Vitek of attempting to take over the board.

Orco, which has properties in the Czech Republic, Poland, Germany, Slovakia and Hungary, plus hotels in Croatia, posted a 142.4 million euro ($193.9 million) net loss in the first nine months of 2013 after taking impairment charges on some projects.

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