Housing corporation Vestia scraps renovations, stops new projects
Monday 02 July 2012
Struggling housing corporation Vestia is to scrap 4,700 projects to build new homes and renovate existing ones in an effort to save €1.1bn.
Older neighbourhoods in The Hague and Rotterdam will bear the brunt of the cuts, which have been prompted by Vestia’s financial difficulties, according to home affairs ministry documents.
Vestia got into trouble after investing in complicated financial products to protect itself against rate increases. But the fall in interest rates means the housing corporation now owes a total of 11 banks over €2.6bn. The corporation has given the banks guarantees covering €1.2bn of its debt.
Vestia, the Netherlands' biggest housing corporation with 89,000 homes, reached a deal with its banks to stave off bankruptcy by freezing interest rates at the end of May.
The corporation’s s financial chief was arrested earlier in May on charges involving bribery and money laundering.