Bank of China (Poland Branch) contributes to debt rescheduling — via maturity extension — of a €185 million EUR syndicated loan for the Blue City Warszawa Ochota Refinancing Project

Project narrative

In 2015, a syndicate of six banks — including the Poland Branch of the Bank of China (BOC) — entered into a €185 million EUR syndicated loan agreement with Blue City Sp. z o.o. — a Poland-incorporated shopping mall development company — for the Blue City Warszawa Ochota Refinancing Project. The loan featured a repayment schedule of quarterly installments. Record ID#109107 captures BOC's contribution. In addition to BOC, the following lenders contributed to the loan syndicate: ING Bank Śląski S.A. (ING Polska), Nationale-Nederlanden Bank N.V., Banco Santander, S.A., BNP Paribas S.A., and Deutsche Postbank AG. ING Polska was the lead bank. The proceeds were used by the borrower to repay a loan taken out in 2004 from other banks to buy the Blue City Warszawa Ochota from a Turkish investor and complete its construction. Blue City was a shopping center and mall with shops, restaurants, service facilities, and 33,000 square meters of offices, located on the Aleje Jerozolimskie in the Ochota district of Warsaw. As of May 2024, the borrower had paid €80 million EUR under the loan, but primarily interest, with only €29 million EUR of the principal repaid, leaving €156 million EUR (zł670 million PLN) outstanding. Prior to September 2023, the lending syndicate entered into at least one amendment agreement with the borrower to extend the final maturity date. Record ID#109108 captures the debt rescheduling. In September 2023, the lending syndicate entered into another amendment agreement with the borrower to extend the final maturity date to June 30, 2024. Blue City officials later claimed that the extension was done on "very unfavorable" terms to it. Record ID#109109 captures the debt rescheduling. In May 2024, the borrower announced that it had filed a court application with District Court for the Capital City of Warsaw to open accelerated debt restructuring proceedings to avoid the banks declaring bankruptcy for Blue City and thus attempting to sell Blue City Warszawa Ochota. Blue City said that its decision to file was prompted to make such a decision by the refusal by ING, representing the bank syndicate, to extend the loan’s final maturity date beyond June 30, 2024. As of May 2024, Blue City claimed to have 96% of its space leased, reported seeing an increase in customers after declines due to the pandemic, and claimed to have never delayed in quarterly installment payments; it alleged that ING was not interested in negotiating or participating in a new loan syndicate featuring over loans and that the refusal to extend was a complete surprise.