In April 2003 Corio entered into an agreement with a company belonging to the Barletta Group, a local real estate entrepreneur, for the turnkey acquisition against a fixed price of Campania Shopping Centre in Marcianise, about 20 kilometres north of Naples.
Grupo Barletta now appears to have approached prospective tenants and to have contacted at least one alternative investor regarding the possible future acquisition. Both actions are without the consent of Corio and in direct conflict with Corio's legal rights. To protect the interest of Corio, Corio has filed claims against the Barletta Group, who has also filed claims against Corio. Corio, based on extensive legal advice, considers its legal position as strong and the claims by Barletta without a sound basis.
The Barletta Group has not complied with the agreed schedule of construction including the required infrastructure (roads etc), which is causing serious delays in the planned completion, the entering into firm lease contracts with tenants and the transfer to Corio of the management of the center.
Corio has made advances against the agreed price on the Campania Shopping Center for a total amount of €46.8 million (excluding related interest) as of 31 December 2005, against which Corio holds securities.
Whilst Corio will continue to press for performance of the contractual obligations, the delays in the construction of the center and the consequent delays in letting will cause a further postponement in the opening of the shopping center for a period of time, which at this time can not be determined.
Source: Corio
