Orco says work on Złota 44 is being reorganized Kasia Marcinkiewicz/WBJ

Speculation about Orco Property Group’s financial situation and the future of its development projects emerged last week as the company announced a delay in publication of its 2008 financial report. Trading in the firm’s stock was suspended for one day.
The company released a statement saying that Orco Property Group was focusing on boosting its operational management. The statement did not specify the reasons behind the missed March 17 deadline.

“The board of directors will meet shortly to choose among the strategic, operational and financial options with a view to improving operational management of the company and meeting all its obligations, in difficult real estate market environment and credit conditions,” the statement read. Any decisions taken by the group are expected to be announced on March 25.

Analysts said the report delay was likely due to gaps in the company’s management. In mid-February, the group laid-off a total of 220 workers. Twelve key members of Orco’s management, including managing director Luc Leroi and vice president for corporate finance Arnaud Bricout, have already left the firm.

“The putting off of the results’ publication can be explained by the incompleteness of the board, which, however, attests to Orco’s weakness,” Miroslav Adamkovic, an analyst at the Czech Komercni Banka, told Parkiet.

Last week also saw media reports about uncertainty over the future of Orco’s flagship project in Poland, the Daniel Libeskind-designed Złota 44 luxury residential tower. According to Gazeta Wyborcza, the majority of construction workers have already left the Warsaw city center site and the rest are mainly securing the part of the building that has already been constructed.

Orco’s representatives, however, denied speculation that construction had been put on hold, maintaining that work was being reorganized due to technological requirements. “We have not halted the construction,” Douglas Noble, managing director of Orco Polska, told Gazeta Wyborcza. He admitted, however, that the company was renegotiating financial issues with a number of its partners including Besix, the Złota 44 project’s general contractor.

According to the firm’s website, Orco currently manages assets of E1.31 billion and is listed on the Euronext in Paris and on the Prague, Warsaw and Budapest Stock Exchanges.