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South Pacific joins string of insolvencies

"Australian real estate developer South Pacific has filed for insolvency in view of reorganising subsidiary South Pacific Group Melbourne Residence, which is developing a 71-villa project in the Tunari commune area, near Bucharest, with less than half the villas sold so far.

The Australians, which have developed another 100 villas in northern Bucharest as part of Sydney complex, are putting the decision to file for insolvency down to disagreements with representatives of Hardwick Holdings, the company's partner in the project.

"Works on the project have been 98% finalised, but we need money for the finishing touches, with works likely to take around ten weeks. We have the approval for the money from the bank, but our partners declined to sign the financing contract, so we decided to start the insolvency proceedings in view of reorganising, and let the court of law decide how the project is completed," Andrew Prelea, CEO and shareholder of South Pacific, told ZF.

Investment in the project amounted to around 9 million euros, with more than 5 million euros being sourced from a loan from the Banca Comercială Română (Romanian Commercial Bank - BCR)." writen by Cristi Moga