7bulls.com pulls out of IT market
A WBJ News Round-up
Developer Kampa Polska, of Tarnów Podgórny, plans to make the final decision early this week on just how it will develop the luxury estates for its recently signed real estate development agreement with the erstwhile IT company 7bulls.com, which recently provided the developer with 19 hectares of land for the project. The company has estimated that the land is worth €2.7 million (zł. 12 million).
Roland Andres, president of Kampa Polska, said that he would meet with executives from Kampa's German headquarters to discuss the property and to put the final touches on the development plans in the wake of signing the contract at the end of last month.
Andres said it was too early to tell what development or financing route Kampa would take for the land located in Stara Wieś near Nadarzyn. He declined to comment further on the options Kampa was considering, preferring to wait until the meetings conclude on Wednesday.
7bulls.com reformed itself into an IT company three years ago, only recently to ditch the business model for real estate.
The contract between Kampa and 7bulls.com specifies that the minimum price for the upscale estates is $20 per square meter, and that Kampa will begin investment in the property once 15 houses are bought. The project must also begin within two years.
The Warsaw Stock Exchange-traded 7bulls.com, once focused on providing Linux solutions, has recently disposed of most of its technology assets and embarked on this new business plan under which it would derive most of its revenues from rental proceeds, according to comments from Jacek Łuczak, 7bulls.com spokesman.
To a much smaller extent it would make money from auto-related operations, a sector on which it originally focused.
In the first quarter of this year, the company recorded €183,000 (zł. 800,000) in revenues and an €84,600 (zł. 370,000) loss.
7bulls.com began trading on the WSE in 1998 under the name of AS Motors and sold Iveco trucks. Trying to keeping pace with the Internet revolution in the country, the company saw an opportunity and delved into the IT sector in 2000, selling off its vehicle dealership.
Its IT business has since failed and the company is now strapped with €9.2 million (zł. 40 million) in debt, which it is gradually paying off through its real estate ventures. In its deal with Kampa, 7bulls.com will incur no financial burden and share in the sales proceeds with the developer.
Recently the company transferred ownership of several real estate holdings to its subsidiary companies and subsequently sold them off.
Hubert Rozpędek, the deputy president overseeing the real estate operations, declined to comment for this article.
