The company blamed delays in closing sales of completed flats, mainly in the Vokovice project, Czech Republic.

It also pinpointed elays in selling several projects, mainly the Marina Dorcol project in Serbia, the commercial plot in Wilanow, Poland, and the Panorama project in Bulgaria.

While it hoped its financial difficulties would be resolved by the end of the first quarter of 2010, the company said there was significant doubt about its ability to continue as a going concern.

It has agreed the terms of a bridging loan of ?0.m from Engel Resources and Development, a member of the parent group, and is exploring other avenues to reduce debt and manage the company's short-term working capital and overall financial position.

The company has not been able to provide a pledge over the Wilanow Property as security under the terms of the previous funding agreement with ERD within the required time scale.

It has therefore agreed to transfer its entire shareholding in EPL, the company that owns the Wilanow Property, to ERD. The property has a book value of ?5.7 while the net book value of EPL is ?5.4m.

Story provided by Business Financial Newswire