BALKANCAR FALLS IN THE HANDS OF ITS CREDITORS
Emil Kyulev and the bank that he runs, ROSEXIMBANK, won the battle they led with the Ministry of Economy for Balkancar Holding. The Sofia City Court decided on September 23 to initiate proceedings for the holding's insolvency. This will put almost the entire industrial trucks building branch of the Bulgarian economy in the hands of the bank. Since it acquired the assets of BALKANBANK in early 2002, ROSEXIMBANK became Balkancar's major creditor and will have absolute majority at the general meeting of the creditors, scheduled for November 13. The creditors who have to appoint a permanent trustee in bankruptcy of the company, will most probably choose Boyana Karaivanova. The Sofia City Court permitted her to remain Balkancar's temporary trustee in bankruptcy until the meeting of the creditors.The magistrates ordered termination of the holding's activities and suspended the rights of its managing body. The decision is to be executed immediately.отпусна за целта 408 029 лв. от държавния бюджет (с постановление Apart from disposing of the assets of the holding, Ms. Karaivanova will vote on its behalf at the general meetings of 10 of its subsidiaries, which are expected to be held soon. As the BANKER weekly wrote several times, the heads of the Ministry of Economy hoped to lobby for raising the capital of the plants under condition so that the newly-issued shares would be given to the State. The Government even released BGN408,029 from the State budget for this purpose. Thus, the subsidiaries would have become majority property of the State, and Balkancar Holding would have remained with up to 30% stakes in their capital. The holding's creditors might have lost everything, because when the insolvency procedure was initiated they would only have controlled minority stakes. However, this is no longer possible. It turned out that Boyana Karaivanova will represent Balkancar Holding at the general meetings of the 10 subsidiary plants of the Bulgarian industrial truck building system. Sources familiar with these events are sure that she will not vote in favour of the capital raises. Now the only chance of the Ministry of Economy is to appeal against the decision of the Sofia City Court at the Sofia Court of Appeal and to win the trial. Because the initiation of a lawsuit will not be sufficient to terminate the insolvency procedure. However, time is working against the interests of the ministry.Beside ROSEXIMBANK, which is to collect receivables amounting to BGN8MN and USD38MN, the other major creditors of Balkancar Holding are Biochim Commercial Bank and Yorset Holding, which inherited the assets of First Private Bank. Their receivables total BGN15.7MN.It is not known yet what will happen with the four industrial truck building plants whose capital was raised under condition in favour of the Ministry of Economy last spring. The 14 companies in the structure of Balkancar Holding held their general meetings in April, but the regional courts only registered the new shares issued by the companies in Pleven, Lom, Knezha, as well as those issued by Balkancar-Sredetz. Thus they were saved from the creditors and mainly from ROSEXIMBANK, but only for a short period of time. Because the bank convinced some of the shareholders to appeal against the capital raise in court. In case he wins, Emil Kyulev will influence the management of these four companies. The state, represented by the Privatisation Agency, will be forced to cancel the competition it organised for legal evaluation of the holding, because it will no longer control it.