The Prague City Council approved a four-year repayment plan with Lorinfaj Promotion, which owes CZK 27 million for the lease of a building on Staroměstské náměstí. The city will thus recover the amount owed within four years and will not risk a lawsuit with an uncertain outcome. The agreement has yet to be signed by the other party.

Lorinfaj Promotion leased the premises from the city's Trade Centre Praha (TCP) at the end of 2020 for fifteen years at a rent of almost CZK 22 million per year. In the first few months, the company paid only CZK 20,000 per month under the contract due to the necessary renovation. However, due to the decline in tourism caused by the pandemic, it soon stopped paying the full amount and the rent debt gradually climbed to more than 40 million crowns. From the end of 2023 it started to decrease.

According to the agreement, the managing director and owner of the debtor will keep three Prague apartments worth almost CZK 25 million as collateral, a value roughly equivalent to the amount owed. At the same time, he will pay off other, lower debts from other non-residential premises that he leases from the city before the payment plan agreement takes effect. The lease of the building at 18 Staroměstské náměstí, where the tenant operates catering, accommodation and small business premises, will then remain in force, including the originally negotiated rent.

"Economically, the agreement is good for Prague. In the event of termination of the contract and court enforcement of the amount owed, there would be a risk that the company would go into insolvency and Prague would never see the tens of millions of crowns and rent from other premises. I believe that the debtor will sign the agreement because it is the result of about a year of complex negotiations and is beneficial for both parties. The city will receive the amount owed and the debtor will be able to continue to do business in the city premises, " summarises the City Councillor. Adam Zábranský, Prague's Minister for Property, Transparency and Legislation.