Another Subsidiary of Bulgaria Moststroy Files for BankruptcyBusiness | June 8, 2011, Wednesday // 15:53| views
Vassil Bozhkov. Photo by BGNES
Moststroy Plovdiv, which is part of Moststroy AD, a construction company believed to be controlled by billionaire Vassil Bozhkov, has filed an application for insolvency, the company announced on Wednesday.
Moststroy AD and three of its subsidiaries announced at the beginning of October last year 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.
Sofia City Court however decided not to presume insolvency as the company has sufficient assets, experts commented.
Analysts have commented that the file for insolvency of Moststroy AD subsidiaries 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.
Moststroy AD is one of the winning bidders to build Lot 4 of the Trakiya Highway and some have commented that the insolvency file is the result of a deliberate plot, hatched by unscrupulous businessmen.
According to the skeptics 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.
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