Top Bulgarian Construction Co Declares BankruptcyBusiness | October 7, 2010, Thursday // 12:02| views
The Holding Mosstroy, controlled by one of the wealthiest Bulgarians, Vasil Bozhkov, declared insolvency. Photo by BGNES
Investors on the Bulgarian Stock Exchange (BSE) are selling scores of shares of the construction company Moststroy (Bridge Construction) after it declared insolvency Wednesday.
In addition to the Holding, controlled by one of the wealthiest Bulgarians, Vasil Bozhkov, three other affiliates in Sofia, Plovdiv and Veliko Tarnovo, also filed for bankruptcy.
On Thursday shares of the company, which is one of the winning bidders to build Lot 4 of the Trakiya Highway, were almost wiped off from BSE loosing 90% of their value – from BGN 1.5 a share down to BGN 0.5.
The shares of the other Holding, owned by Bozhkov – Patishta (Roads) are following a similar trend in the last few days after it was revealed he parted with the control package in his main companies.
Moststroy and the three affiliates are insolvent, and heavily in debt while the Holding is facing several legal actions, frozen assets and property, the company's announcement said, adding the major part of the debt belongs to the United Bulgarian Bank and to the equipment leasing company "Interlease."
In August "Interlease" annulled all contracts with Moststroy and took back all of its machinery.
Around the same time, employees of "Moststroy Veliko Tarnovo" complained about not being paid since the beginning of the year.
The company's management states the insolvency is just a form of restructuring of the business and after implementing a recovery plan, it could begin functioning normally once again.
Moststroy books show the company has BNG 28 M in debt and revenues of merely BGN 893 000, all when the firm was chosen and a month ago began building Lot 4 of the Trakiya Highway from the city of Yambol to the town of Karnobat, which is the last section of the much anticipated road.
The Holding took part in the public bid for Lot 4 with Patishta as a leading partner. The latter also has short-term debt in the amount of over BGN 100 M, but Minister on Regional Development, Rosen Plevneliev, still reassured all this would not interfere with the completion of the highway.
If the recovery plan fails, the company must be liquidated.
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