BALKANCAR HOLDING TO DRAG ITS SUBSIDIARIES INTO DESTRUCTION
The sale of Balkancar Holding's assets will start on October 6, when the first secret tender for spare parts owned by the holding will be organized. The company was declared insolvent in September 2002. Its creditors decided on a general meeting held last June that the holding assets should be cashed down through a sale of independent units.A few tenders will be organized by the end of this year. However, it is unlikely that buildings of the company as well as its stakes in subsidiaries will be offered for sale, because the legal proceedings related to the holding's stakes in its subsidiaries are a serious obstacle for the evaluation of its property.In the meantime, the syndic of the holding, Boyana Karaivanova, started to collect receivables of the holding from an Algerian plant constructed by Balkancar in the 1980s under the terms of an interstate agreement. According to a reliable source, the amount owed by the Algerian company to the Bulgarian state and to the holding totals USD15MN. The car-building company is to receive about a third of this amount.Only five of the 14 subsidiaries of Balkancar Holding reported a profit last year. They are Balkancar-G. Mihailov AD - Knezha, Balkancar-Erma AD - Trun, Balkancar-Ruen AD - Assenovgrad, Balkancar-ZP T. Petrov AD - Sofia, and Balkancar-ZPDEA G. Kostov AD - Sofia. The rest of the companies are in a poor financial condition, Valentin Purvanov, Deputy Minister of Economy, told the BANKER weekly. The poor results are due to the interrupted links between companies in the system of Balkancar in Bulgaria and those abroad, as well as to their limited access to crediting sources. The plants have gradually lost positions on the international markets. It would be very difficult for them to recover, especially as the holding is insolvent, Purvanov said. The only outcome, he added, is to finish the privatisation procedure started on January 27 of the state-owned stakes in the subsidiaries and of Balkancar Holding itself. However, the court terminated the privatisation of Balkancar on April 21, 2003, on account of the insolvency procedure. The Commercial Law enables a company, subject to insolvency procedure, to be privatized within four months. In the course of this period, the bankruptcy procedure is interrupted. This is exactly what the Privatisation Agency did, but after a competition was announced, only one offer was submitted - that of Balkars Consortium (which includes Industrial Capital Holding and related companies). However, the holding and the agency did not reach an agreement because of the court ban. The PA appealed in the Court of Appeals against the decision taken on April 21 which stopped the privatisation procedure. Still, the magistrates rejected the objections of Iliya Vassilev's team.According to the syndic Boyana Karaivanova, the magistrates rejected the PA's appeal several months ago. The Privatisation Agency has not yet decided to stop the procedure. According to Gacho Gruev, lawyer of the car-building company, the outcome is a new procedure to be initiated and stakes of subsidiaries to be separately sold.