Regional News
Chinese planning to
invest $200 million
A consortium of Chinese investors is planning to invest upward of $200 million in a vast commercial complex in Budapest's District 15, the Business Journal has learned.
The complex, to be called Asia Center, will sit on a site of more than 11 hectares near the Polus Shopping Center, and will have a total gross floor space of 206,000 square meters, sources close to the project said. That would make it twice the size of the WestEnd City Center, the retail-office-hotel colossus in district 13, which opened last December.
The planned complex highlights the growing influence of Hungary's 17,000-strong Chinese community, many of whose members are active in the wholesale and retail trade. Until now, most local Chinese entrepreneurs have operated from an archipelago of individual stores and markets.
Unlike WestEnd and other new commercial complexes, Asia Center will mostly cater to the trade, offering space to hundreds of wholesalers from China and other Asian countries. There will also be retail areas as well as space for cultural events involving up to 10,000 people.
The center will incorporate the principles of Feng Shui, the traditional Chinese discipline used to give a building positive energy and harmony, and its occupants wealth and happiness.
According to sources close to the project, construction could start as early as this autumn, in advance of a 2002 completion date. The developer recently obtained a building permit from district 15.
The building was designed by the Kasib Engineering Manager Office. The center's developer, also called Asia Center, is 51%-owned by Vienna-based IDAG Immobilienbeteiligung und Development with the remaining stake held by Budapest-based Chinese Faith Profit Co., represented in Hungary by Chinese entrepreneurs Song Wu Quiang and Li Li Ping.
According to company documents, Asia Center's total equity capital is Ft 1.83 billion, of which Ft 939 million is in the form of cash from the Austrian company and the remaining Ft 894 million from the two Chinese investors in the form of real estate assets.
Ako G. Washio and Peter Olah
MOL tops Matav
in H1 sweepstakes
First-half results by Matav failed to match profit reports from Hungary's other two business giants, OTP Bank and oil and gas company MOL.
While OTP reported a 26% rise in first-half net profit, and MOL posted profit of Ft 34.6 billion a whopping 92% increase the same period last year Matav did not meet market expectations. The firm reported a net profit of Ft 41.5 billion for the first six months, up a meager 14.5% on the same period last year.
"While the results of MOL and OTP are clearly positive, Matav's are a bit worse than I had expected, even though our outlook for the company was even worse than the general consensus," said Gabor Tamas, an analyst with Postabank Securities and Investment.
MOL's first-half net profit may have soared from Ft 17.9 billion in the same period last year, but its gas business along with its stock price fared badly, a state of affairs analysts blamed on government intervention.
In order to curb energy and drug price hikes to limit inflation, the government set natural gas prices below MOL's import cost. As a result, the company's gas unit bled Ft 37.6 billion during the first half and MOL's stock plummeted 27%. Analysts say the stock could recover once the government relinquishes its gas pricing role.
The first-half net profit of OTP rose to Ft 19 billion from last year's Ft 15.1 billion. Analysts said that the bank's perky results were due to a jump in demand for mortgages and loans, and that they expect OTP to march on, given the announcement that the bank will take part in the general process of consolidation occurring in the country's banking sector.
Agnes Csonka
State to buy more
Antenna shares
The state said last week it will buy new shares worth Ft 3.5 billion in Antenna Hungaria, giving the national broadcaster cash to pay for its stake in the country's latest mobile phone provider, Vodafone.
Shareholders voted to sell 625,000 new Antenna shares at Ft 5,600 each, 18% below the current market price. That will raise the company's capital to about Ft 16 billion. Antenna is currently 86% owned by the state, with the balance traded on the Budapest Stock Exchange.
Antenna needs to pay for its share of the $200 million to be paid for Hungary's fourth mobile phone license. Still, the company will have to sell more shares if it wants to expand and benefit as the fastest economic growth in the region boosts demand for mobile phone, data and television transmission services.
Antenna needs "to increase capital by Ft 15 billion," said Jozsef Miro, an analyst at Cashline Securities.
Antenna owns 20% of V.R.A.M., the local subsidiary of Vodafone, which won Hungary's fourth mobile phone license in June 1999. Antenna also enjoys an option for Magyar Posta's stake in V.R.A.M.
While the state's purchase of shares raises its stake to just under 87%, the government plans to sell 37% of the company this year, reducing its holding to 50% plus one share.
Companies such as British Telecom, Vivendi and Orange had earlier been named as possible buyers of a strategic stake in the company. Many investors are avoiding the stock due to concern about the government's plans to keep control of the broadcaster.
That concern forced the government to sell shares last month at 6.7% below the market price in the first of two planned sales to reduce its stake. Investors bought only one-tenth of the stake the state offered for sale on July 6. The government raised Ft 1.2 billion from the sale of 170,996 shares at an average Ft 7,001 each. It had aimed to sell 13% of the company.
Antenna announced last Monday that its first-half net income rose 91% to Ft 915 million, compared with Ft 480 million in the same period last year.
Ben Richardson/Bloomberg
