Center Point Group changes hands
16 September, 2010

Center Point Group, one of the biggest Georgian developer companies, handed over its management right to Dexsus, a new investment and developer company, for 3-year term. Dexsus assumes responsibilities to handle USD 100 million-worth assets of Center Point as well as pay off USD 100-million worth arrears accrued by the company to its clients.


Embarrassed clients of Center Point that was running 28 under-construction projects at the moment, hope now to get their apartments built at last. The heavily indebted

company that can neither get through with the construction project nor pay off the paid sums to its clients, handed over management right of 100% of company’s assets and passives to fledgling Dexus investment and developer  company on September 10, 2010. Dexsus took over all the projects of Center Point together with their liabilities and assets and assumed responsibilities to clear all commitments. Paying off arrears accrued by the indebted company starting 2007, needs USD 100 million.

 


According to Giorgi Kananashvili, Director General of Dexsus, his company is staffed by highly skilled professionals operating at Georgian real estate market for the last 10 years who attracted about USD 300 million worth foreign investments totally via different projects.  Dexuss has already worked out the 3-year action plan aimed to complete all under-construction projects and provide all households and clients who will cover their apartments’ price completely will get their accommodations. Dexsus will soon present a detailed business plan for 2011 and al creditors and consumers will be able to be acquainted with the plan.

According to Vakhtang Rcheulishvili, Former Director General of Center Point Group, company faced difficulties due to political instability of Georgia starting November actions of 2007, August war of 2008 and April political instability aggravated the situation. Ultimately only 22% of contracted clients continued to pay that was sufficient only to conserve construction projects and pay off salaries, and interest rates to Center Point’s Invest company clients established in spring of 2007 when the construction boom swept the country. This investment company turned out the most burdensome ultimately.  It raised funds from population and allowed even petty investors to invest successfully in center Point Group run projects.  The essence of the investment product was simple: potential investor invested money in Center Point Group projects and the Company fixed 24% of interest rate per year (i.e. 2% per month). The Invest Company accrued to USD 6 million in the fund but was no more able to pay 2% of interest rate per month and the rate dropped to 1%.


In this past July Rcheulishvili hoped to sell out its office accommodations and 20% of company’s shares starting this fall in frames of the rehabilitation plan to overcome the crisis. An Israel-based bank was interested in the shares, Rcheulishvili told Georgian Journal, but the Center Point Invest companies’ liabilities discouraged the potential investor.
“The Israeli Bank was interested to buy our company, the thing that 90% of our projects been under construction was actually sold enticed the investor as promised big profit, but they did not want to buy liabilities of Invest Company and we had to hand over 100% of the company to Dexsus by 3-years management right,” Rcheulishvili said.

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