situation I have done, I have come to conclusion that the situation is not nearly as bad ... here is why
Out of 9 communities
4 have total debt of $75M (50M euros) and SRZ must pay the lenders the difference between the sale price and the so called "release price" .. we do not know the "release price" for each unit. However, a reasonable guess would be 20% of total debt. Similar to paying down 20% down payment. Since we want to be conservative, we will raise that to 33% or about 1/3. Hence SRZ will be at most stuck with $25M for these 4 units ..
2- For the remaining 5, SRZ has guaranteed that it will pay for the monthly mortgage (interest and principal). But when the mortgage ends, it does not pay for the remaining principal. Because we do not know the length of the mortgage payments, or the remaining principal, we can not accurately guess the total exposure. But we do know that they have closed only 1 of these 5. So, the cash flow from the other 4 is probably covering the cost of interest and probably portion of the principal. Hence, the exposure to these 5 should be low. To be conservative, we assume the exposure to these 5 communities is as high as the exposure for the other 4 under worst case conditions.
So, in total, for the 9 communities
- worst case cash total cash outflow should be about $50M.