Financing challenge for Lamda Development
The main stakeholder in the vehicle to develop the plot at Elliniko, the Latsis family’s Lamda Development, is facing a major challenge, which includes risks associated with the construction company’s share capital increase.
By undertaking to exercise the preferential rights corresponding to it (51.9 percent) in their entirety and cover the shares that may remain available in the increase of up to 650 million euros, Lamda is for now placing at least 337.3 million euros – and possibly even more, if small stakeholders do not take part – and expects returns after the construction of the first few properties on site.
Prior to that it will need to implement expenditure of about 1 billion euros for the formation of infrastructure, green spaces and generally for the plot’s development, and immediately pay the first tranche to the state – i.e. a third of the full sum of 915 million euros for the concession.
Besides the share capital increase, Lamda is also in advanced talks with banks for the establishment of a credit line, whose amount is expected to be close to 1 billion euros, given the project’s financing requirements over the first few years.
More details concerning the company’s business plan are expected following its extraordinary general meeting, which is scheduled for October 10.