Arion Bank sees no need for earnings warning over hotel project

Arion Bank says it sees no need for a special market announcement or earnings warning over the halted Radisson RED hotel tower project at Skúlagata 26, mbl.is reports. The bank said work was under way to find a solution after construction stopped on Monday and contractors were sent home.

In a written response to mbl.is, the bank confirmed it is a mortgage holder in the project. It said the matter was being handled through appropriate channels, but did not explain what a solution might involve or when a decision could be expected.

Asked whether the project’s status had financial implications for the bank, Arion said financial effects in such cases are assessed against the criteria for issuing earnings warnings. It did not consider a separate market announcement necessary.

RÚV has reported, citing sources, that the project’s commercial bank had stopped further funding. Arion did not confirm whether it had halted financing. RÚV also reported that water damage earlier this year caused significant damage to completed building units.

A report in Morgunblaðið in June said construction of the 17-storey tower was well advanced and could be completed over the summer.