Allan Saunderson is managing editor of Property Finance Europe and a contributor to GlobeSt.com.

COLOGNE, GERMANY-Four subsidiaries of locally based listed property group Vivacon have filed for insolvency due to a liquidity gap resulting from high vacancy rates of their real estate assets due to their location, the company said. The group itself is also at a high risk of insolvency at the end of this quarter if debt is unable to be prolonged with creditor banks.

All are set up as limited liability companies and are focused solely on residential properties in the cities of Salzgitter and Kassel. Affected are almost 4,000 some 10,000 housing units of the group. The group said the liquidity gap "cannot be bridged in the near term, according to the current forecast of the group's management."

Vivacon said the insolvency was filed in the context of its current restructuring efforts and served to safeguard group liquidity. A leading auditing company has been mandated to prepare a restructuring opinion. The company's shares fell by a sharp 21% after the announcement to all-time lows at €0.56, giving a market capitalisation of just over €11 million.