Mirax Group is freezing the implementation of promising projects until the situation in the financial markets stabilizes. The company’s head, Sergei Polonsky, told journalists this today.
"Over the next year, the company will not acquire new development projects or begin construction on new properties. All of the company’s financial resources will be concentrated on projects already under construction," S. Polonsky said. *The head of Mirax Group explained the company’s decision by the need to stay flexible amid the crisis in global financial markets, including Russia’s, and believes this policy should remain in effect for about a year. * Here Mirax has racked up $1.2 billion in loans. But will it actually be able to pay them back? To keep construction going, it will have to either borrow or sell. It won’t be able to borrow cheaply now—and probably won’t be able to borrow at all. And sales are in bad shape too. *Another member of Mirax Group’s board of directors, Alexei Kunitsyn, said that "if macroeconomic developments turn entirely negative, the group will have to resort to tough measures, including staff cuts." If the inflow of cash is so small that they have to cut personnel, that’s a symptom. * People may still feel a little sorry for investment bankers, but when developers of "luxury real estate" start collapsing, everyone will be smiling very broadly.
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