Bulgaria Moststroy Insolvency Slammed as Deliberate Plot

Business | October 10, 2010, Sunday // 16:41|  views

The newest section of Trakiya Highway, connecting the towns of Stara Zagora and Chirpan, is already in dire need of repair works, a fact that has been linked to the file for insolvency of construction company Moststroy AD. Photo by BGNES

The file for insolvency of Moststroy AD, a construction company believed to be controlled by billionaire Vassil Bozhkov, is the result of a deliberate plot, hatched by unscrupulous businessmen, a lawyer and former MP argues.

"For me this is an example of a deliberate bankruptcy, to which unfair businessmen resort sometimes to achieve certain goals," Mincho Spassov told the Bulgarian National Radio.

Moststroy AD and three of its subsidiaries announced on Thursday that they have filed for bankruptcy after all their bank accounts were frozen because of unpaid debts.

A loan borrowed from the United Bulgarian Bank, a unit of the National Bank of Greece SA, was due on May 31, but the company said it has no money. Its construction machines and other equipment have been seized by Interlease, the company that leased them.

According to Spassov the move aims to restructure the profitable units of an enterprise and put them into companies, in which the owner is a shareholder, leaving the liabilities in the old company and to the harm of creditors.

"The insolvency news most probably has to do with the fact that Moststroy AD is one of the winning bidders to build Lot 4 of the Trakiya Highway," Spasov, who is a former chairman of the interior affairs commission in parliament, claims.

Prime Minister Boyko Borisov recently announced that the state will allot additional BGN 30 M for repair works of the highway section, linking the towns of Stara Zagora and Chirpan, but Spassov finds this surprising because the expenses should have been covered by the project's executor.

According to analysts the file for insolvency of Moststroy AD is very bad news for the Bulgarian capital market, but comes as no surprise. The precedent is feared to further dent the trust of the investors, particularly those from abroad, and make it more difficult to get credits from banks.

Under local legislation a company, which has declared insolvency, can restructure and draw up a rehabilitation plan.

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Tags: Nove Holding, insolvency, Interlease, United Bulgarian Bank, Vassil Bozhkov, Trakiya Highway, lot 4, Patishta, Moststroy, BSE, Rosen Plevneliev, Mincho Spasov


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